Sales at Richemont fell 4 percent at constant exchange rates in the year to March, missing expectations in a Reuters poll of analysts, but with a clear improvement in the second half thanks to a recovery in the United States and strong growth in China.
At actual exchange rates, sales also declined 4 percent to 10.65 billion euros ($11.58 billion), just slightly below a 10.68 billion euro forecast in the poll.
Jewellery sales growth, mainly under Cartier and Van Cleef & Arpels brands, slowed to 7 percent at constant currency from 8 percent in 2015/16. Sales of watches, including IWC and Piaget timepieces, were still under pressure, declining 15 percent, on top of an 8 percent drop the previous year.
Net profit slid 46 percent to 1.21 billion euros, mainly due to a one-off gain related to Net-a-Porter in the previous year, short of a 1.34 billion euro forecast in the poll.
The operating margin deteriorated to 16.6 percent from 18.6 percent a year ago, a situation Richemont is addressing with cost-saving measures and a management reshuffle.
Its shares were indicated 0.2 percent firmer in pre-market activity, in part due to news of a new share buyback. The company proposed raising its dividend 6 percent to 1.80 Swiss francs per share.
“Volatility and uncertainty in the geopolitical and trading environments are likely to prevail,” the world’s second-biggest luxury goods group said in a statement on Friday.