Group operating profit from continuing operations decreased 17 percent to €2.2 billion (~$2.37 billion) (-12 percent at constant exchange rates) in the first half, yielding an operating margin of 21.9 percent. Profits from continuing operations amounted to €1.7 billion, reflecting a 20 percent year-on-year decline. The Group incurred a significant loss of €1.3 billion from discontinued operations, mainly attributed to a non-cash write-down of Yoox Net-A-Porter (YNAP) assets. Richemont maintained a strong net cash position of 6.1 billion euros, supported by cash flow from operating activities amounting to 1.2 billion euros, it said in its financial statement.
Richemont reported a resilient performance during the first half, with sales reaching €10.1 billion (~$10.89 billion), down 1 percent at real exchange rates but stable at FX rates. constants. Operating profit fell 17 percent to 2.2 billion euros, hit by currency problems and reduced activity in Asia Pacific, particularly China. Direct customer sales accounted for 76 percent of total sales.
The Group's sales performance varied by region during the period analyzed. Sales in the Americas increased 10 percent, reinforcing the United States as the largest single market. Japan was a standout performer, with sales increasing 32 percent. Europe and the Middle East and Africa recorded solid growth, while sales in the Asia Pacific region saw a significant decline of 19 percent, largely due to reduced activity in China.
Sales in other business areas increased 4 percent, although the segment posted an operating loss of €52 million (~$56.04 million), and Fashion and Accessories Maisons posted a marginal operating margin of -2 percent.
Richemont's results reflect strategic investments in distribution and manufacturing, improving direct-to-customer sales, which now represent 76 percent of total sales. However, the Group's profitability was affected by negative exchange rate movements and poor performance in the Asia Pacific region. A notable development was the non-cash write-down of €1.2 billion related to the revaluation of YNAP's assets, as part of an upcoming strategic partnership with Mytheresa, the statement added.
Gross profit for the period amounted to 6,771 million euros, or 67.2 percent of sales. In absolute terms, gross profit decreased by 3 percent. Operating profit in the first half decreased by 17 percent compared to the same period of the previous year, to 2,206 million euros, or 21.9 percent of sales.
Net operating expenses increased 6 percent compared to the prior-year period. Selling and distribution expenses also increased by 6 percent, accounting for 26.4 percent of sales in the current period compared to 24.6 percent a year ago, reflecting network expansion in a inflationary context. Profits for the period from continuing operations, of €1,729 million, were 20 percent lower than the previous year's period.
The company's earnings per share (1 'A' share/10 'B' shares) amounted to 0.779 diluted euros. Excluding YNAP, diluted earnings per share (1 'A' share/10 'B' shares) from continuing operations were €2.943.
Fiber2Fashion News Desk (KD)
