Richemont FY Numbers - Cash Flush


Luxury goods company Richemont, reported its full-year numbers with a surprise dividend cut and a 19% drop in revenues. The Rupert run business also sold about EUR2 billion worth of bonds, in order to bulk up its balance sheet as a hedge against the uncertain future we find ourselves in at the moment.


Richemont Trading update - Hong Kong Still Hurting


This morning Richemont released a trading update for the quarter ending 31 December 2019. Total sales increased 6% for the period. Europe grew by a solid 10% while Asia lagged a little, growing by 3%. That was because of a large contraction in Hong Kong. Americas grew 9%, Japan contracted 1% and the Middle East and Africa grew by 6%. Online retail grew by 8% and now represents 18% of group sales.


Richemont 6M - Numbers Hurt By HK Protest


On Friday morning before the market opened Richemont released their six months numbers. Unfortunately they missed market expectations resulting in the stock dropping 5.7%. One of the main reasons for the miss is due to the protests currently going on in Hong Kong. With all the unrest that has been around since June, tourism numbers have plummeted, meaning the number of customers going through their stores has also dropped.


Richemont Teams Up With Alibaba


Richemont may be very proud of the age of their brands but they have certainly stuck with the times when it comes to selling their goods. According to Tech Central the Richemont Alibaba joint venture went live yesterday.


Richemont Digital Channel


If you have been following our daily message for a while you would know that Richemont owns a large online luxury retailer called Yoox Net-a-Porter. Richemont consolidated the two businesses to achieve scale and now own more than 95% of the combined entity.


Richemont FY Numbers - Going Digital


On Friday morning Richemont released their full year numbers. It was a big year for the group because management moved the company into online retail in a big way. They bought the shares that they didn't own in Yoox Net-A-Porter, and they bought Watchfinder, a leading omni-channel platform for premium pre-owned timepieces.


Q3 Trading Update


Richemont, the second largest luxury goods company in the world released its third-quarter trading update on Friday. The maker of Cartier had two very prominent strategies going into 2018. First, increase sales channels by pushing online/e-commerce, which was only 1% of the groups' total sales. Second, invest more in Chinese operations.


Richemont 6M - Online increases


Late last week Richemont released interim 6-month results for the period ending 30 September. The below table indicates the change in numbers over the comparable periods.


Richemont FY numbers - watch division hurting


Richemont just reported its results for the financial year ended 31 March 2018. It managed sales of EUR 10 979 million (up by 3% at actual exchange rates) and profit for the year of EUR 1 221 million (up 1%). Double digit sales growth was maintained in mainland China, Hong Kong, Korea and Macau.


Richemont 6M - back to growth


On Friday morning Richemont announced its unaudited consolidated results for the six month period ended 30 September 2017, showing what we mostly already knew thanks to numbers from their competitors. After having a tough couple of years, mostly due to the corruption crack down in China, they are back on the growth path. This was highlighted by a resurgent Hong Kong.


Richemont FY numbers - sales down


Richemont, the luxury goods producer, released results for their full year last Friday. Sales had fallen as a result of a tricky operating environment. Asia Pacific was flat, it still constitutes 37 percent of the overall business by sales, Europe is 29 percent, having fallen recently, much of that due to the recovery of the Americas (which is now 17 percent of all sales). There were pockets of strength, Mainland China, Korea and the UK, as well as the US.


Richemont 3Q trading update - sales growth


Richemont produced a 3rd quarter trading update for the period to end 31 December yesterday, just before the market opened. Jewellery sales across their platforms were stronger. Asia Pacific showing good growth, thanks mostly to South Korea and Mainland China, Macau and Hong Kong still a little in the dumpsters, the release suggests continued declines. I suspect a slight change in shopping patterns, mainland customers will become bigger consumers, even with the higher duties. In China it is called "consumption tax", see Import-Export Taxes and Duties in China. As far as my "research" on Hong Kong, the rate is zero for imported jewellery, it is by extension far cheaper to buy luxury items in Hong Kong than on the mainland.


Richemont 6 month numbers - drop in sales, management changes


Richemont stock soared 8 percent on Friday, the last three years however has seen the stock slip nearly 9 percent, notwithstanding the excellent day Friday. There were six month results and at face value they hardly looked like anything to get excited about. Perhaps they were less bad, perhaps we can put it down to the announcment that there are likely to be significant changes to the management structure of the business. Even at a global level there are no real peers in the luxury goods industry to compare Richemont to. LVMH has booze and handbags aplenty, Kering owns Puma and Volcom, so it is hardly comparable. Prada. Nope. Tiffany & Co., maybe it is close enough. The quality of the brands of Richemont are at a "higher" level. Some of their Maisons (houses) are timeless themselves. See a recent deep dive - Richemont review - balance sheet and brands for the future.


Richemont review - balance sheet and brands for the future


I did a deep dive into Richemont yesterday. There is no doubt that the stock has been more than a little disappointing. Luxury goods across the globe have looked sloppy as fewer vacations to Europe coincide with lower purchases by foreigners, equally however since the current Chinese leadership has cut down on corruption and the culture of "gifting", there has been a slowdown in sales. Richemont as it exists nowadays is less than 30 years old. There was the tobacco element for more than half the life of the company, the cash flows were used to fund some of the acquisitions. They own some of the most prestigious and iconic luxury brands on the planet, Cartier and Van Cleef & Arpels, as well as watch brands like Vacheron Constantin, Piaget, Panerai, Baume & Mercier, amongst others. They own Chloe and Lancel, Dunhill, Mont Blanc and Peter Millar, Purdey and Shanghai Tang, in a division of "other" that contributes only 16 percent of overall sales.


Richemont 5month numbers - Rev down


There is very little that Richemont can do about a crackdown on graft and gifting in China, there is even less that the company can do about terrorism and people delaying travel to Europe. On those said trips, often people buy the expensive products that they produce. The company will continue to produce their quality products, which are timeless in themselves. In fact, as we often say around these parts, the longer they own the timeless and obviously quality brands, the more valuable the name and brand becomes. I look at LV bags and can't see the attraction, mind you, what the hell do I know about bags! The brands are what they are, old, quality and pretty much timeless.


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