Richemont: strong sales growth but disappointing net income

Last week Compagnie Financière Richemont published its full results for the 2021/2022 fiscal year (which ended at the end of March). Reported sales were up 46% (44% at constant exchange rates), above analysts’ expectations. All regions contributed to this strong increase, but the Americas and sales to end consumers contributed the most. Watch sales were up 53%, followed by jewelry at +49%. Unfortunately, online sales did not grow as much (+27%). It is on this online division (YNAP) that investors have focused their attention. Richemont had bought YNAP in 2018 to turn it into a digital platform for multi-brand sales, but it never really worked out as planned. Since last year, Richemont has been trying to sell this division to a specialized online company (Farfetch), but negotiations are dragging on, while losses are piling up. Richemont’s net result was below expectations and the stock market did not hesitate to punish the share with a sharp drop of -13% on Friday.