By Andrea Figueras
Luxury goods holding company, Compagnie Financiere Richemont, is set to announce its first half fiscal 2024 results on Friday. Here is what you should know:
According to a consensus forecast by five analysts provided by FactSet, Richemont is expected to report sales of 10.34 billion euros ($11.08 billion) for the first half. In the same period of fiscal 2023, the company posted sales of EUR9.68 billion.
A poll of estimates compiled by FactSet indicates that Richemont is projected to report earnings before interest and taxes (EBIT) of EUR2.88 billion for the period. In the previous year, the company reported EBIT of EUR2.72 billion.
What to Watch Out For
- Revenue Slowdown: Investors will closely monitor the magnitude of the revenue slowdown in the company’s largest division, jewelry maisons, as the luxury industry grapples with a normalization of consumption patterns. Analysts from Citi highlight the importance of China’s growth in this division, as the country is a significant market currently facing economic challenges.
- Agreement with Farfetch: An update on the deal with Farfetch, through which Richemont plans to sell a stake in online platform Yoox Net-A-Porter, is expected. Citi analysts emphasize the execution of the second phase of the deal by Farfetch, which involves the acquisition of the remaining stake in YNAP, as liquidity concerns arise.
- Foreign-Currency Impact: Unlike its peers, Richemont could experience a negative impact on its EBIT margin due to unfavorable foreign currency-exchange rates. UBS predicts a possible decline to 26.7%.