Richemont Group reports April weak performance

Richemont expects no improvement in the trading environment after underlying sales growth slowed further in the final quarter of its fiscal year hit by weak demand for watches in Hong Kong and Europe. Sales grew by 6% to € 11,07 billion, while at constant exchange rates, sales decreased by 1%

Luxury watch makers are grappling with poor demand from tourist shoppers in Europe, which is seeing fewer visitors following attacks in Paris and Brussels, and a downturn in their biggest market, Hong Kong.

Richemont said Asia Pacific remained weak in April due to no signs of recovery in Hong Kong and Macau.This was “partially offset by continued improvement in mainland China, which was up 26 percent on a constant rate basis”, the Geneva-based company said in a statement on Friday

Operating profit decreased by 23% due to a non-recurring property disposal gain of € 234 million in the prior year and current year restructuring and write-down charges of € 97 million

Net profit rose 67 percent to 2.23 billion euros ($2.50 billion), due to a 639 million euro gain relating to the merger of its Net-a-Porter business with Yoox last year and as a financial charge in the year-ago period was not repeated.

The average forecast of analysts polled by Reuters was 2.43 billion euros. Richemont proposed a dividend of 1.70 francs per share for 2015/16, up from 1.60 francs last year.

Cartier at SIHH 2016