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.
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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.”
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”.