Earnings climbed 5 percent to €1.94 billion ($2.2 billion) in the 12 months through March. Analysts expected €2.05 billion. The operating margin slipped to 13.9 percent, the lowest in more than a decade.
These results show how much of a bet Richemont is making on e-commerce. Last year’s purchases of YNAP and Watchfinder have boosted sales but eroded profitability. Excluding those units and other one-time costs, operating profit would have increased 13 percent.
Investors may be disappointed that Richemont didn’t give many more details on YNAP’s joint venture with Chinese online retailer Alibaba. The company merely said it’s progressing.
Richemont’s double-digit growth in mainland China and Hong Kong will reassure investors. The results come a day after Burberry Group Plc reported disappointing sales growth from that market.
Richemont shares have climbed 16 percent so far this year. The stock slumped 29 percent last year, the worst performance in a decade.
By Corinne Gretler; editors:Eric Pfanner, Thomas Mulier and Kenneth Wong.