The answer is hard to determine, say principals at Compagnie Financière Richemont. Consumer behavior is still impacted by COVID-19, China remains volatile, and U.S. growth is slowing. Are storm clouds gathering over luxury?
The demand for high-end watches, jewelry, and accessories remains robust, resulting in solid results for the first half of the fiscal year. Richemont’s sales increased 24 percent to 9.68 billion euros at actual exchange rates, and its profit from continuing operations increased 40 percent to 2.11 billion euros.
On Friday, Richemont’s shares surged more than 10 percent to close at 118.10 Swiss francs.One thing is certain: COVID-19 continues to change consumption patterns worldwide, for better and for worse. Richemont managers discussed volatility and a lack of visibility in the market.
In fact, Richemont says consumption patterns have changed so dramatically since COVID-19 that no single geography is driving revenue or dominating the balance sheet.
U.S., European, and Chinese sales generated around 2 billion euros each in the first half. In the first half, Richemont booked a 2.9 billion euro loss from discontinued operations following the 2.7 billion euros noncash write-down of YNAP net assets. Will the Lord come to Richmond’s rescue?