[caption id="attachment_88533" align="aligncenter" width="720"] Source: Company reports/Coresight Research[/caption]   FY19 Results Richemont’s FY19 revenues came in at €13.98 billion, up 27.3% year over year as reported and at constant currency, and slightly above the €13.86 billion consensus estimate recorded by S&P Capital IQ. During FY19, Richemont increased its stake in European online luxury retailer YNAP from 49% to 100% and also acquired British online watch retailer Watchfinder.co.uk. Consequently, diluted EPS surged 128.3% year over year to €4.93, but was below the consensus estimate of €5.17. Excluding YNAP and Watchfinder, revenues rose 8% at constant currency. The group witnessed growth across all business areas and regions and double-digit increases in Asia Pacific and the Americas, as well as in directly operated boutiques in the jewellery maisons and specialist watchmakers segments. Gross margin declined 340 bps to 61.8%. Though the consolidation of YNAP and Watchfinder contributed to an increase in gross profit, it had a dilutive effect on the group’s gross margin. SG&A as a percentage of sales declined 60 bps to 47.9% while operating expenses jumped 26% primarily due to one-off expenses of €95 million related to disposals and acquisitions and €165 million related to amortization charges. Operating margin fell 280 bps to 13.9% due to the one-off expenses outlined above. Performance by Geographic Segment All growth figures are at constant exchange rates. Europe: Sales grew 37% in Europe mainly due to the consolidation of YNAP and Watchfinder, both of which have a strong presence in the region. Asia Pacific ex-Japan: Richemont grew sales 20%. Performance was driven by double-digit growth in all main markets, including mainland China and Hong Kong, and by 20 net new store openings in the region. Americas: Reported the highest increase in sales, of 40%, primarily driven by the inclusion of YNAP which has a strong sales base in the US. Japan: Sales grew 16% due to higher domestic sales and tourists, and double-digit growth in the specialist watchmakers segment and high single-digit growth in the jewellery maisons segment. Middle East and Africa: Reported an 8% increase in sales, prompted by growth in the jewellery maisons segment. Performance by Business Segment Jewellery maisons: Registered strong growth of 10% year over year. Jewellery sales benefited largely from the continued success of the “Love” and “Juste un Clou” collections at Cartier. Watch sales benefitted from the successful launch of “Santos de Cartier.” Operating margin expanded 160 bps to 31.5%. Specialist watchmakers: Sales in this segment grew due to strong sales in Asia Pacific, Japan and the Americas. Operating margin grew 300 bps to 12.7%, largely driven by high growth in wholesale, improved manufacturing efficiencies and improved cost-control. Online distributors: Richemont introduced this as a separate segment this year, to report sales for YNAP and Watchfinder. Previously, it reported these sales under YNAP as well as the Maisons. In FY19, sales in this segment were €2.10 billion. All business lines at YNAP grew by double-digits while Watchfinder experienced single-digit growth due to Brexit uncertainty and the temporary closure of its London flagship store for renovation. Outlook Richemont did not provide a quantitative outlook for the current fiscal year. Chairman Johann Rupert said the company “remains confident in [its] ability to achieve [its] long term ambitions.” For FY20, analysts expect:

• Revenues to grow 7.3% to €15.0 billion.
• Diluted EPS to fall 34.6% to €3.22.