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RAPAPORT... Richemont's revenue increased 3.9 percent year on year to $11.5 billion (EUR 10.41 billion) in the year that ended on March 31. Sales measured at constant-exchange rates rose 1 percent. Revenue from the retail division rose 4.1 percent to $6 billion (EUR 5.436 billion), while wholesale revenue increased 3.6 percent to $5.5 billion (EUR 4.974 billion). Profit fell 35.5 percent to $1.5 billion (EUR 1.334 billion), which the company attributed partly to ongoing foreign exchange hedging activities. The company stated that jewelry maisons Cartier, Van Cleef & Arpels and Giampiero Bodino observed a "challenging environment," however, the division managed to still improve sales 4 percent to $6.2 billion (EUR 5.657 billion) and operating margin to 34.9 percent compared with 34.8 percent on year earlier. Revenue from the company's specialist watchmakers increased 4.6 percent to $3.5 billion (EUR 3.123 billion), but operating margin fell to 23.4 percent compared with 26.1 percent. By region and at constant-exchange-rates, sales improved 7 percent in Europe and jumped 13 percent across the Middle East and Africa, while they rose 8 percent in the Americas. Revenue declined 6 percent in both the Asia Pacific region and in Japan.
The value of inventory at the end of the fiscal year jumped 22.1 percent to $6 billion (EUR 5.438 billion), in part due to a significant appreciation of the Swiss franc against the euro. Net cash at the close of the year rose 16.3 percent to $6 billion (EUR 5.419 billion). Looking ahead, Johann Rupert, the chairman of Richemont, informed shareholders that sales in April, as measured by constant-exchange rates, slipped 8 percent, but by actual rates they rose 9 percent. "The retail channel grew and significantly outperformed wholesale, where anticipation of worldwide pricing adjustments in May slowed purchases by our wholesale partners. The first two weeks of May indicated some normalization of the wholesale market. We believe that long-term demand for high-quality products will continue to grow around the world."
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