Richemont shares jump as full-year earnings and sales beat estimates

Richemont shares jump as full-year earnings and sales beat estimates — Stocks in Richemont (SIX:) hit a new high on Friday after the luxury group delivered better-than-expected sales and profits for its 2023 fiscal year on the back of a rebound in Chinese demand.

Group-wide annual sales rose nearly a fifth from a year earlier to a record 19.95 billion euros (€1=$1.0897), beating estimates from the Bloomberg consensus of 19.66 billion euros. The Swiss company behind high-end brands like Cartier and Van Cleef & Arpels said the jump was partly due to the strength of its directly operated stores, which contributed 68% of total sales.

Growth also resumed in the key Richemont region of Asia-Pacific, where sales were boosted by the lifting of travel and health restrictions in mainland China in the final quarter of the fiscal year. The Americas, which includes the United States, the largest luxury market, also saw sales unexpectedly accelerate year-over-year.

The revenue performance contributed to a “significant” increase in profitability, Vontobel analysts noted. Annual operating income reached a record level of 5.03 billion euros. Yields represented a 34% increase over 2022 and were well above forecast by €4.82 billion.

Citing the results and strong cash flow generation, Richemont unveiled an ordinary dividend of CHF 2.50 (CHF 1 = $1.1190) per “A” share, an increase of 11% year-on-year. former. A special dividend of CHF 1.00 per “A” share, which is still subject to shareholder approval, has also been proposed.

In a statement, Chairman Johann Rupert said he was confident the company was well positioned to meet the strong demand expected from China’s travel resumption. However, he noted that “economic volatility and political uncertainty” remain features of the business environment.

ZKB analysts said Richemont’s returns “impress across the board,” adding that any slowdown in the United States and Europe should be offset by a continued rebound from Chinese consumers.

Rival luxury companies including LVMH (EPA:) and Dry (EPA:), also saw their shares climb.


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