5 Month sales report

Richemont have released a five month sales report on the same day as their AGM, at first glance and according to the Twitter people it is a miss in analyst expectations. After a long period of very strong growth, both the currency and the local environment in which they operate in have weakened. Here is the table from the sales release:



Sloppy in Asia Pacific and most especially soggy in Japan, post the hike of the sales tax in Japan which has had a marked impact. The commentary has some bright spots however, the Americas have made a comeback and the Middle East is strong:

European and Middle-Eastern sales continued to benefit from tourism. In the Asia-Pacific region, sales were lower in Hong Kong, Macau and mainland China, offsetting positive developments in other markets. In mainland China, retail sales grew while the rate of decline in wholesale sales softened. Sales growth in the Americas remained strong. In Japan, prudent consumer sentiment and a surge in purchases in March 2014 ahead of a sales tax increase combined to dampen sales in the April to August period, as expected.

The Chinese sales being softer comes after months of a crackdown on gifting, advertising is not exactly accepted as luxury goods are still a hot topic in a country that is essentially a Communist one. The stock price is off heavily this morning, in my mind there is no doubt that this represents a strong buying opportunity. If you needed to know what my reasons are, here it is, from the annual report review: Re-look, recalibrate, stay long. Opportunity knocks!