Richemont profits drop 17% to €2.2bn

Richemont has reported a 17% decrease in operating profits to €2.2bn (£1.82bn) for the six-month period ended 30 September 2024, reflecting the impact of the decline in sales at its specialist watchmakers, a slight gross margin erosion and ongoing investments for its maisons’ long-term growth.

The group also saw a slight dip in sales of 1% to €10.1bn (£8.35bn), driven by a 17% year-on-year sales decline at its specialist watchmakers in the Asia Pacific region to €1.7bn (£1.41bn).

However, it recorded very solid sales progress in most regions, led by the Americas and Japan in value, which grew 10% and 32% respectively at actual exchange rates. The group also noted that Europe and the Middle East and Africa posted robust growth.

With 2% sales growth overall (+4% at constant exchange rates), the group’s jewellery maisons, Buccellati, Cartier and Van Cleef and Arpels, continued to show strength and gain share.

The jewellery maisons delivered a €2.3bn (£1.90bn) operating result and a corresponding 32.9% operating margin.

Additionally, as a consequence of lower sales on fixed operating costs and a strong Swiss franc, profits were more than halved for watchmakers to €160m (£132.3m) for the period to 30 September, corresponding to a 9.7% operating margin.

On 12 September 2024, the group completed the acquisition of distinctive Italian jewellery Maison Vhernier and on 7 October, Richemont announced that it had entered into binding agreements for the acquisition of 100% of the share capital of YNAP (Yoox-Net-A-Porter) by Mytheresa, a luxury multi-brand digital group signed an agreement by which Mytheresa will acquire YNAP in exchange for a 33% equity stake in Mytheresa, subject to customary closing conditions.

Johann Rupert, chairman of Richemont, said: “In the first half of this fiscal year, we continued to deliver sustained resilience in a world where uncertainty has become the norm. We saw solid sales growth across most of our regions offsetting continued weakness in Chinese demand, which, as I had predicted, will take longer to recover and is particularly affecting our Specialist Watchmakers.

“What we are seeing in the world today is not unprecedented. It illustrates just how important it is to have strong leadership with a long-term vision, to continue to invest in our Maisons’ excellence in crafting and marketing distinctive and timeless creations, to manage our offer with discipline, and to have an agile structure and a solid balance sheet. Looking ahead, whilst I remain cautious in this uncertain context, I am therefore confident in our ability to navigate the current as well as future cycles and to deliver sustained value over the long term for all stakeholders.”