Steep profit decline for Richemont Group in the third quarter 2014
World’s second largest luxury group, Richemont reports predominantly negative results for the six month period ended 30 September 2014. Sales grew by a modest 2 % to € 5 430 million and by 4 % at constant exchange rates, while operating profit decreased by 4 % to € 1 311 million, reflecting volatile trading conditions and unfavourable currency movements.Operating margin declined by 160 basis points to 24.1 % and profit for the period declined by 23 % to € 907 million, reflecting primarily unrealised currency hedging losses.
Richemont results for the first half were fairly resilient overall, given the volatility of the environment that affected our clients and retailer partners in all regions, with the notable exceptions of the Americas and Middle East. Worth highlighting is the resilience of the jewellery category where sales rose by 10 % at constant exchange rates – said the company in a statement.
The company’s statement added : in this difficult environment, the Group’s Maisons benefited from successful product launches and, in certain markets, price increases. Lower precious material prices and cost containment measures helped mitigate subdued sales and the overall negative impact of foreign exchange rates. The decline in operating profit was limited to 4 %.
Sales in Asia declined by 2%, including Japan which registered a 10% decrease. Both the watches and the jewellery maisons saw modest performances in the third quarter of 2014. Richemont owns major luxury maisons such as Cartier, Piaget, Van Cleef Arpels, Chloe etc.