Richemont forecasts 45% decline in first-half operating profit

Zurich - Richemont [JSE:CFR], the maker of Cartier jewellery, said first-half operating profit will probably decline about 45% as it buys back unsold watches from retailers in Hong Kong and Europe suffers from a drop in tourism.

Revenue slid 13% excluding currency shifts in the five months through August, the Geneva-based maker of Vacheron Constantin timepieces said in a statement on Wednesday.

Analysts had expected an 11% decline, based on the median estimate of those polled by Bloomberg. The decline in operating profit includes one-time restructuring charges of about €65m.

The Swiss watch industry is grappling with another year of declining exports as China’s campaign against extravagant spending is aggravated by a drop in tourism after terrorist attacks in France and Belgium.

Swatch Group reported a 54% decline in first-half profit in July.

The company, whose full name is Cie. Financiere Richemont, reports five-month sales figures each year on the day of its annual general meeting with shareholders.

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