Compagnie Financière Richemont SA (CFRHF) FY25 Financial Performance Review

May 16, 2025 10:02 AM - Andrew Wynn

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Compagnie Financière Richemont SA (CFRHF): Robust Financial Performance and Market Outlook

Compagnie Financière Richemont SA (CFRHF), a Swiss luxury goods conglomerate, delivered strong financial results for fiscal year 2025 (FY25), ending March 31, 2025, driven by its flagship Jewellery Maisons, including Cartier and Van Cleef & Arpels. Trading on the PNK exchange, CFRHF reported a GAAP earnings per share (EPS) of €6.39 (approximately $6.90), with headline EPS (HEPS) at €6.351, slightly below Bloomberg estimates of €6.713 due to non-recurring items like the YNAP write-down.

Richemont's FY25 group sales rose 4% at constant exchange rates to €21.4 billion (approximately $23.11 billion), surpassing analyst estimates of €21.33 billion. Fourth-quarter (Q4) sales reached €5.17 billion ($5.58 billion), up 7% year-on-year, beating forecasts of €4.98 billion. The Jewellery Maisons segment led with an 8% sales increase, offsetting an 11% decline in watch sales and weaker demand in Asia Pacific.

CFRHF's financial metrics underscore investor confidence. As of March 1, 2025, the trailing price-to-earnings (P/E) ratio was 82.90, reflecting a high valuation driven by a share price of $202.85 and TTM EPS of $2.447. The forward P/E ratio, based on forecasted earnings, stood at 22.01, suggesting optimism about future growth. The price-to-sales (P/S) ratio was 4.37, and the enterprise value to revenue ratio was 4.39, with an enterprise value of $101.99 billion.

Regional performance varied, with sales at constant exchange rates showing robust growth: Europe (+11%), Americas (+15%), Japan (+30%), and Middle East & Africa (+14%). Asia Pacific saw a 13% decline, primarily due to reduced demand in China. Retail sales, comprising 74% of group sales, grew 6%, highlighting Richemont's successful direct-to-client strategy.

Richemont's financial health remains solid, with a debt-to-equity ratio of 0.87, indicating moderate leverage, and a current ratio of approximately 2.52, suggesting strong liquidity to meet short-term obligations. The company reported an operating profit of €4.47 billion, slightly below estimates of €4.55 billion, and raised its dividend to CHF 3.00 per share, reflecting confidence in its cash flow generation. Levered free cash flow (TTM) was $2.93 billion.

Despite challenges like Trump tariffs and softness in China, Richemont's shares rose 5.5% in early trading post-earnings, outperforming peers like LVMH. The company's focus on high-quality craftsmanship and digital transformation positions it well for sustained growth in the luxury retail sector.

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