Dylan Bradfield is a portfolio manager at Sharenet
Buy: Richemont
Richemont delivered a strong start to financial 2027, with group sales reaching €6.3bn in the quarter ended June 2026, up 20% at constant exchange rates and 17% at actual rates. Growth was broad-based and led by the jewellery maisons, which rose 24%, marking the seventh consecutive quarter of double-digit growth. Specialist watchmakers improved sequentially to move up 8%, while the other segment (mainly fashion & accessories) grew 9%. All regions contributed positively. The Americas (+27%) and Japan (+36%) were standout performers, while Asia Pacific rose 21% and Europe grew 11%. The Middle East & Africa returned to growth (+3%) despite lower tourist spending.
Retail sales increased 24% and now account for 71% of group sales, with direct-to-client channels reaching 77%. The balance sheet strengthened further, with net cash rising to €9.1bn from €7.4bn, supported by the sale of the Avolta stake. Management noted a persistently volatile environment but highlighted resilient underlying demand for its core jewellery brands despite macroeconomic and geopolitical challenges. The stock, not surprisingly, recently hit a 52-week high.
Sell: Reinet
Reinet restarted its share buyback programme after deciding not to pursue a major investment opportunity. The buyback runs from June 22 2026 until the 2027 AGM in mid-August. The first tranche allows up to €75m (2.5-million shares) by mid-August, while the full programme targets up to €500m (16.5-million shares), or around 10% of shares in issue. This is viewed positively as it signals management’s intention to return capital to shareholders from its large cash pile. Prior buybacks reduced share count by 7.2% and lifted NAV by 4.3%.
The Rupert family has committed to not sell any shares, which would increase its stake to 29.6% if the full buyback completes. The share price has already fallen over 20% recently. While the buyback is seen as supportive, many investors are unhappy with management’s early exit of British American Tobacco and the ongoing fee fest which hinders investors’ returns. Not surprisingly, the stock recently hit a 52-week low.