Shares in Richemont spiked 2.8 percent on Friday (11 January) after the Swiss luxury goods group reported that its third quarter total sales climbed 25 percent to 3.92 billion euros from last year's 3.13 billion euros.
The company reported growth in most regions, with a double digit increase in mainland China compensating decreases in the Middle East and Europe. Of note, in October 2018, Richemont and Alibaba Group announced a strategic partnership to form a joint venture to launch a luxury retail platform for Chinese consumers.
Sales in Europe surged 35% to 1 147 million euros, in Asia Pacific moved up 17% to 1 389 million euros, in Americas climbed 41% to 801 million euros and in Japan soared 14% to 344 million euros. But, sales went down by 3 percent to 234 million euros in Middle East and Africa.
Retail sales advanced 6 percent to 2 049 million euros and wholesale sales grew 1 percent to 1 172 million euros. Online retail sales surged to 694 million euros from prior year's 59 million euros.
Sales over the nine month period to December increased by 23% at actual exchange rates and by 24% at constant exchange rates, broadly in line with the positive trend seen in the first six months of the financial year, the company said.
The Group’s net cash position at 31 December 2018 amounted to € 2.3 billion (2017: € 5.1 billion) with a gross cash position at € 6.6 billion following the € 4.0 billion corporate bond issued in March 2018.
Richemont was created in 1988 by the spin-off of the international assets owned by Rembrandt Group Limited of South Africa (now known as Remgro Limited). Established by Dr Anton Rupert in the 1940s, Rembrandt Group owned significant interests in the tobacco, financial services, wines and spirits, gold and diamond mining industries as well as the luxury goods investments that, along with the investment in Rothmans International, would form Richemont.
Richemont owns some of the world's most prestigious luxury goods Maisons, each of which has a proud history and heritage of craftsmanship and design.
The Group operates in four business areas: Jewellery Maisons, being Cartier and Van Cleef & Arpels; Specialist Watchmakers, being A. Lange & Söhne, Baume & Mercier, IWC Schaffhausen, Jaeger-LeCoultre, Officine Panerai, Piaget, Roger Dubuis and Vacheron Constantin; Online Distributors, being YOOX NET-A-PORTER GROUP and Watchfinder.co.uk; and Other, including Alfred Dunhill, Azzedine Alaïa, Chloé, Montblanc and Peter Millar. YOOX NET-A-PORTER GROUP (YNAP) and Watchfinder.co.uk consolidated in the Group’s accounts since 1 May and 1 June 2018, respectively.
For the financial year ended 31 March 2018, Richemont reported sales of € 10 979 million, operating profit of € 1 844 million and profit for the year of € 1 221 million.
Richemont ‘A’ shares are listed on the SIX Swiss Exchange, Richemont’s primary listing, and are included in the Swiss Market Index (‘SMI’) of leading stocks. Richemont South African Depositary Receipts are listed in Johannesburg, Richemont’s secondary listing. As at 31 March 2018, members of the Board and parties closely linked to them owned a total of 37 138 Richemont ‘A’ shares.
The Group’s results for the current financial year will be announced on Friday, 17 May 2019 and its annual general meeting will be held on Wednesday, 11 September 2019.
The Swiss Market Index ended Friday's trading session up 0.3 percent to 8,828.22, while the Swiss Leader Index and the Swiss Performance Index also ticked up 0.3 percent.