Nov 8, 2013
Exchange rates hit profits at luxury goods firm Richemont
Nov 8, 2013
Richemont, the world's second largest luxury goods firm that owns Cartier and Montblanc among others, said Friday that adverse currency movements had hit operating profits for the first half of its fiscal year.
Operating profits came in at 1.37 billion ($1.84 billion) for the six months until the end of September, the Swiss firm said in a statement, down one percent on the same period last year.
The company, which is especially sensitive to exchange rate fluctuations, blamed the drop on "unfavourable currency movements."
Net profits rose however by 10 percent, to 1.18 billion euros, in the middle of the range of analysts' expectations.
Sales came in at 5.32 billion euros, a rise of four percent on the same period a year ago.
Group chairman Yves-Andre Istel said that exchange rates were "likely to weigh on our reported results" in the next six months as well.
"While the comparative sales figures for the important holiday trading period are less challenging, the subdued overall environment and in particular our continued investments for the long term call for increased caution," added the chairman.
Finance director Gary Saage told reporters that Richemont was likely to hang on to its Lancel brand. "It makes more sense to keep it," he said.
Investors appeared disappointed by the result, sending the stock down around two percent on the main Swiss index, which was only fractionally in the red.
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