Richemont Has More Downside to Come After Brief Relief
Richemont is one of the world’s leading luxury goods groups. The Group’s luxury goods interests encompass some of the most prestigious names in the industry, including Cartier, Van Cleef & Arpels, Piaget, Vacheron Constantin, Jaeger-LeCoultre, IWC, and Montblanc.
The history of growth in group sales was driven by a number of factors including geographic spread, the mix of sales by product type and by distribution channel. Sales growth has also been derived from the acquisition of new businesses which combine unique design with traditional skills.
Operating expenses increased by 14% for the Johannesburg Stock Exchange (JSE) listed company during the year amid adverse exchange rate effects, this had an obvious effect on Richemont’ s share price, compared to the 13% increase in purchases through Richemont’ s own boutiques. Shares recently fell 6.4 percent after it said sales growth slowed and management struck a cautious note. The sales numbers were hurt by moves to combat the grey market and efforts by the Chinese government to discourage consumers from spending overseas.
For the financial year ended 31 March 2018, Richemont reported sales of EUR 10 979 million, operating profit of EUR 1 844 million and profit for the year of EUR 1 221 million.
Let's look at the technicals.
Weekly: I am looking for a price move back down to the previous low and a bit beyond before looking to trade the reversal. The low could reach as far as 70 and perhaps even 65.
From that point I will be looking for signs of a reversal.
Daily: I am expecting a rally at some point soon. This will form a correction for further downside. I will look to trade the next wave to the downside when I see confirmation.
The history of growth in group sales was driven by a number of factors including geographic spread, the mix of sales by product type and by distribution channel. Sales growth has also been derived from the acquisition of new businesses which combine unique design with traditional skills.
Operating expenses increased by 14% for the Johannesburg Stock Exchange (JSE) listed company during the year amid adverse exchange rate effects, this had an obvious effect on Richemont’ s share price, compared to the 13% increase in purchases through Richemont’ s own boutiques. Shares recently fell 6.4 percent after it said sales growth slowed and management struck a cautious note. The sales numbers were hurt by moves to combat the grey market and efforts by the Chinese government to discourage consumers from spending overseas.
For the financial year ended 31 March 2018, Richemont reported sales of EUR 10 979 million, operating profit of EUR 1 844 million and profit for the year of EUR 1 221 million.
Let's look at the technicals.
Weekly: I am looking for a price move back down to the previous low and a bit beyond before looking to trade the reversal. The low could reach as far as 70 and perhaps even 65.
From that point I will be looking for signs of a reversal.
Daily: I am expecting a rally at some point soon. This will form a correction for further downside. I will look to trade the next wave to the downside when I see confirmation.