COMPAGNIE FINANCIERE RICHEMONT

Recommendation history

• FY 2025HoldHold: Richemont delivered strong FY25 sales of €21.4bn (+4%) and resilient Jewellery Maisons growth of 8% to €15.3bn, but operating profit fell 7% to €4.5bn as gold, FX and Specialist Watchmakers deleveraging compressed margins. The investment case remains attractive through Cartier and Van Cleef brand equity, direct-to-client exposure and €8.3bn net cash, but China remains weak—combined China/Hong Kong/Macau sales fell 23% and Specialist Watchmakers sales declined 13%—while management offered no FY26 guidance amid tariff, consumer and gold-price uncertainty.
• FY 2024HoldHold: Richemont delivered strong underlying execution but momentum is normalising. H1 sales rose 12% at constant exchange rates and 6% reported, while operating profit fell 2% to €2.7bn and margin declined to 26%; jewellery remained strong at +10%, but specialist watches fell 3%. The €5.8bn net cash position and brand strength support the long-term case, but management offered no FY24 guidance and left material uncertainty around China, FX and Farfetch/YNAP.
• FY 2023BuyBuy: Richemont delivered exceptional FY23 execution, with sales up 19% to nearly €20bn, operating profit up 34% to €5.0bn, operating margin at a record 25.2%, and net cash of €6.5bn. Cartier and Van Cleef-led jewellery growth, rising direct-to-client penetration to 74%, and manufacturing constraints that protect scarcity support the long-term thesis, but the lack of guidance, an emerging US slowdown, uncertain Chinese tourist recovery, and unresolved watch-market normalization limit near-term visibility.
• FY 2022BuyBuy: Richemont delivered an exceptional H1, with sales up 24% versus H1 FY20 at constant exchange rates, operating profit up 67% versus pre-pandemic levels to nearly €2.0bn, and a 21.9% operating margin. The core jewellery and watch Maisons are gaining share through strong brand equity, while the €3.15bn net cash position supports investment; the key tension is that management provided no quantitative FY outlook and acknowledged volatile China, pandemic, travel and spending conditions, alongside structurally higher investment needs.
• FY 2021HoldHold: Richemont showed a meaningful recovery but remains highly exposed to an uncertain pandemic and an unresolved digital restructuring. H1 sales fell 25% at constant exchange rates, operating margin dropped to 8.3% from 15.7%, and YNAP/Online Distributors generated a €138 million operating loss; the bull case is China-led momentum, jewellery resilience and €2.1 billion net cash, while the main tension is whether the Farfetch partnership can fix YNAP without prolonged losses or strategic complexity.
• FY 2020HoldRichemont delivered resilient H1 FY20 growth, with sales up 9% at actual exchange rates and 6% constant currency, operating profit up 3% to €1.17 billion, and core Maisons’ operating margin improving 70 bps to 21.8%. However, the €194 million Online Distributors loss, a 120 bps margin decline at Jewellery Maisons, Hong Kong weakness and no full-year guidance keep the risk/reward balanced rather than a clean buy.
• 2020-08-26HoldHold: Richemont has credible long-term digital and leather-growth initiatives, with leather up 5% CAGR over the last five years and Group Maison online sales already above 10% in Q1. However, management offered no earnings guidance, cut the dividend by 50%, and remains unable to forecast when travel and luxury demand will normalize; the call supports patience rather than a fresh buy.