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Richemont Q3 sales up 6% YOY as YNAP, Watchfinder drive online growth

Compagnie Financière Richemont SA on Jan. 11 reported double-digit sales growth for the third quarter of fiscal 2019, primarily due to the integration for the first time of YOOX Net-A-Porter Group SpA, or YNAP, and Ltd.

Excluding YNAP and Watchfinder, like-for-like sales for the three months to Dec. 31, 2018, rose 6% at actual exchange rates and 5% at constant exchange rates. The company said sales grew in all regions except for the Middle East, where unfavorable currency movements and a strong basis of comparison led to a 13% year-over-year drop, and in Europe, where the "yellow vest" protests in France led to store closures for six consecutive Saturdays.

Asia-Pacific revenue rose 10% on a like-for-like basis on the back of a double-digit sales increase in mainland China, but growth slowed in Hong Kong due to the strength of the Hong Kong dollar versus the renminbi that resulted in lower tourist spending. Sales in Japan rose 7% year over year, while sales in the Americas increased 9%.

Retail sales rose 5% year over year, while Richemont's wholesale channel saw 1% growth. The Cartier and Van Cleef & Arpels brands' revenue increased 8% as lower wholesale specialty watch sales were offset by higher sales via directly operated boutiques.

Total group sales, including YNAP and Watchfinder, increased 25% year over year, or 24% at constant exchange rates, to €3.92 billion.

Richemont delisted YNAP in June 2018 and acquired Watchfinder in July, deals that have increased the company's online revenue to €694 million in the third quarter of fiscal 2019 from just €59 million in the year-ago period. The company said YNAP posted double-digit growth across all regions, driven by solid performances in all its segments, while Watchfinder's sales went up "more moderately."

Richemont added that its net cash position as of Dec. 31, 2018, was €2.3 billion versus 5.1 billion in the year-ago period.

In lunchtime trading, Richemont shares were up 2.2% at CHF67.26.