Richemont (CFR) stock hits all-time high on soaring sales
By Jenni Reid
11:34, 12 November 2021
Compagnie Financiere Richemont’s share price continued its November rise to reach an all-time high Friday morning as the luxury goods group reported a boom in sales.
CFR stock was up 8.64% on the previous day to CHF 133.25 (£107.77) at midday CEST on the SIX Swiss Exchange.
Half-year results showed sales up by double-digits year-on-year in all regions and business areas, and also above pre-pandemic levels.
The group also said it was in advanced talks over the sale of its Yoox Net-a-Porter ecommerce business.
Sales bounce back
In the six months to September 30, the business – which owns luxury brands including Cartier, Montblanc and Chloé – saw sales increase 63% year-on-year to €8.9bn at actual exchange rates.
Operating profit rose 331% year-on-year to €1.9bn and was 67% higher than in the same period in 2019. Cash from operations of €1.7bn was nearly double 2019’s figure.
“Richemont has delivered an excellent set of results in the first six months of the financial year; a period marked by a volatile but improving ‘post-vaccination’ environment,” Richemont chair Johann Rupert said.
What is your sentiment on MC?
Business boost
The Americas, Asia Pacific and the Middle East and Africa and Europe all saw double-digit annual sales growth, though Europe and Japan remained below their 2019 levels, which the company blamed on lower tourist spending.
Jewellery sales were up 36% compared with 2019, watches up 7%, and online sales up 8%.
However, its online businesses deepened their operating loss by 2% year-on-year to €141m.
Not for sale
Richemont announced today it was in “advanced talks” with online retail platform Farfetch over an investment in its lossmaking Yoox Net-a-Porter ecommerce business and partnership over its future, with aims to turn it into a “neutral platform with no controlling shareholders”.
But on a call this morning, Rupert responded to speculation of a merger with rival Kering by saying: “We made a clear statement that Richemont is not for sale and we are not interested in merging.”
Luxury return
Luxury sales recovered in 2021 after crashing during the coronavirus pandemic, with luxury giant LVMH reporting record revenue in the first nine months of the year.
Consultancy Bain & Company forecasts the luxury goods market will be ahead of 2019 levels this year, and given the drop-off in 2020 had “never seen a year of surging performance to match 2021.”
That is despite concerns of a decline in Chinese sales amid a government crackdown on corporate profits and “excessive incomes”.