- Full-year operating profit falls more than analysts expected
- Cartier owner forecast difficult comparisons in first half
Richemont, the maker of Cartier jewelry and IWC Schaffhausen timepieces, forecast a difficult first half after sales plunged 18 percent in April.
The Swiss company also reported full-year earnings that missed analysts’ estimates Friday, dealing a further blow to the ailing luxury-goods industry. The shares fell as much as 5.6 percent.
“In the near term, we are doubtful that any meaningful improvement in the trading environment is to be expected,” Chairman Johann Rupert said in a statement. “Challenging comparatives will persist through September.”
The company, whose full name is Cie. Financiere Richemont SA, has been struggling with the strong franc and is cutting almost 100 jobs in its Swiss watchmaking operations, having reduced headcount by 500 in the past year. Aside from weak demand in Asia, Richemont is also affected by a slowdown in tourism to Europe following the Paris terror attacks in November, a trend that analysts say may extend after the bombings in Brussels in March.
Richemont had a “weaker start to fiscal 2017 than feared,” wrote Rogerio Fujimori, an analyst at RBC Capital Markets. ““Comparatives should get easier in the second half of the current fiscal year.”
Operating profit fell to 2.06 billion euros ($2.3 billion) in the 12 months through March, the Geneva-based company said. That missed the average analyst estimate of 2.29 billion euros.
Co-Chief Executive Officer Bernard Fornas retired at the end of March, leaving Richard Lepeu as sole CEO. Richemont doesn’t plan further job cuts in Switzerland, Lepeu said on a call with reporters.