Most Recent Articles In Business
Latest Business Articles
- Sephora to Launch Online China Flagship With JD.com
- Macerich Profits Rise 38%
- MAGIC Men’s Being Reimagined
More Articles By
LONDON — Last year’s weaker euro is set to boost year-end net profit by 30 percent at Compagnie Financière Richemont, parent of brands including Cartier, Van Cleef & Arpels and Alfred Dunhill.
The company said in an unscheduled statement on Tuesday that sales climbed 14 percent on a reported basis, and 9 percent on a constant currency basis, for the 2012-13 fiscal year ended March 31.
Richemont’s stock closed up 8.3 percent percent at 73.80 Swiss francs, or $79.02 at current exchange.
Richemont “A” shares are listed on the Swiss Stock Exchange, which requires companies to reveal any significant fluctuation in profits — up or down. Richemont will release its 2012-13 results on May 16.
Richemont said operating profit is likely to show an increase of about 18 percent compared with the previous year.
Thomas Chauvet, a luxury analyst at Citi, said Richemont’s expected sales figure of 10.1 billion euros, or $13.03 billion, is broadly in line with consensus estimates and with Citi projections, and pointed to a “reassuring acceleration” in the group’s fourth quarter. Chauvet said the projected operating profit figure was also broadly in line with consensus estimates.
As reported, Richemont’s third-quarter sales climbed 9.3 percent to 2.86 billion euros, or $3.72 billion, but fell short of analysts’ estimates. In its third-quarter trading update in January, Richemont also said it remained “unclear” how business patterns in Asia, which notched double-digit growth over the 2012-13 year, would evolve in the short term.
Citi also maintained its “buy” rating on the Richemont stock, which it says has been underperforming the broader sector by 4 percent on concerns about weaker trading in China.
“We think the market fails to acknowledge superior long-term earnings power (and high earnings quality), strength of the portfolio, coherent, long-term oriented strategy, limited M&A risks, stable management team and strong balance sheet,” Chauvet said in the report.