Richemont’s worldwide third quarter turnover, October to December 2018, rose by 24% at constant exchange rates, boosted by a full three months of sales from its ecommerce businesses YNAP and Watchfinder.
Yoox, Net-A-Porter, Mr Porter and Watchfinder which are housed in Richemont’s Online Distribution division, contributed sales of €638 in the quarter, pushing turnover to €3.9 billion for the final three months of 2018.
Excluding Online Distribution, sales for Richemont rose by 4.6% in the quarter.
In a report accompanying the figures, Richemont provides comparisons to the same quarter in 2017 without YNAP and Watchfinder, which were not part of the group in the prior year.
“Sales grew in all regions, with the exception of the Middle East and Europe. During the latter part of the quarter, sales in Europe were affected by social unrest in France which negatively impacted tourism and led to store closures for six consecutive Saturdays. The disposal of Lancel in June 2018 also weighed on the year-on-year comparison. A 10% increase in sales in Asia Pacific reflected double digit sales growth in mainland China and good increases in other main markets. Sales growth in Hong Kong slowed, primarily due to the strength of the Hong Kong dollar versus the renminbi that resulted in lower tourist spending. Sales in the Americas rose by 9%, benefiting from good performance by the Jewellery Maisons and the Other business area. In Japan, a 7% expansion in sales was driven by continued domestic and tourist spending as well as the impact of newly opened directly operated boutiques. Unfavourable currency movements and a strong basis of comparison weighed on sales in the Middle East and Africa, which decreased by 13% over the period.,” Richemont says.
Sales through its own physical stores rose by 6% while wholesale business was up by 1%.
Rogerio Fujimori, luxury goods analyst for investment bank RBC Europe Limited, suggests that the markets will be broadly positive about the quarterly result. “The main positives in the quarter came from Asia (+10% growth ex-YNAP driven by double-digit growth in Mainland China), Americas (+9% ex-YNAP) and Japan (+7% ex-YNAP) offsetting an organic sales decline in Europe (primarily due to France) and the Middle East (up against a very strong comparative).”
Richemont shares have stated the year recovering from a 30% drop in 2018 and are current trading around 10% up since their their 52 week low of €60.9 on December 27.
