Geneva-based luxury giant Richemont on Thursday said its net profit rose by three percent in 2013-2014 over the previous financial year on higher sales, despite the impact of exchange rates.
The world’s second largest luxury goods group, whose stable of brands includes Cartier, Piaget, Jaeger-LeCoultre and Montblanc, said that its net profit reached two billion euros ($2.7 billion).
The group called the results “satisfactory”
Co-CEO Richard Lepeu said the company expects to continue its expansion in the coming year, including in Switzerland, where it employs 9,000 people (out of a global total of 30,000).
In a conference call he said the company would continue hiring in its home country despite the uncertainty resulting from the February 9th referendum in favour of curbing immigration, the ATS news agency reported.
The company, which owns 20 luxury brands, opened 42 new boutiques last year, bringing the global total to 1,056.
Richemont’s financial year runs from April 1st to March 31st, and the profit figure was in line with expectations.
Sales meanwhile rose by five percent to reach 10.6 billion euros, slightly higher than the 10.5 billion euros expected by analysts.
Taking into account exchange rate fluctuations, sales rose by ten percent, Richemont said, underlining that the Japanese yen and, to a lesser extent, the US dollar had had an unfavourable impact.
Operating profit was unchanged, at 2.4 billion euros, in part due to exchange rates and also because the group set aside 25 million euros for restructuring of Montblanc, known for its luxury fountain pens.
Richemont said that strength in its jewellery and specialist watch segments offset the softness of certain fashion brands and Montblanc.
Sales rose by two percent in the Asia-Pacific region, though that marked a slowdown compared with the previous financial year.
Richemont said that while sales held up in Hong Kong and Macao, they slipped in mainland China, a market where the luxury watch sector has been affected by anti-corruption measures that ban luxury gifts.
In Europe, sales rose by nine percent.
While Richemont’s boutiques in Geneva, Paris and London continued to benefit from tourist buyers — many of whom are from Asia — the group also pointed to improved demand from European consumers themselves.
Among other developments, the group confirmed that Johann Rupert, currently taking a sabbatical year off, will return as Richemont’s chairman in September.