By Geoffrey Smith
Investing.com -- Dufry (SIX:DUFN) stock rose more than 3.5% on Tuesday to its highest in 11 weeks after the duty-free retailer said the post-pandemic rebound in its business was even sharper than expected.
The Swiss-based company said revenue in July had reached 90% of its comparable level in 2019, the last summer before the advent of COVID-19, as tourists across almost all the world took advantage of the chance to open their wallets at airports for the first time in nearly three years.
Revenue rose by nearly 150% from a year earlier in the second quarter, leaving it a little more than 21% below its level of three years ago, the most recent spring quarter not to have been disrupted by health restrictions. Consequently, the company swung from a sizeable loss in the first half of 2021 to a modest reported net profit of 12.1 million Swiss francs, and a healthier operating profit of 152.4 million francs.
In contrast to retailers in some other sectors, Dufry said its momentum had been sustained so far in the third quarter, with July revenue rising to 90% of its pre-pandemic level globally, and over 100% in some markets such as North America. The only major outlier from the trend was China, where the still-extensive health measures in place due to the government's 'Zero COVID' policy meant that revenue was still only 16% of 2019 levels in the first half.
The company said it sees "strong demand and positive trends on all key indicators," although it added that it is staying "vigilant, given limited visibility regarding the geopolitical environment, pandemic related developments, the economic situation and consumer sentiment."
Dufry's comments are testimony to the strength of pent-up tourism demand around the world. The company's optimism, however, is conspicuous in the context of broader developments in international travel this summer, however: various airports across Europe and North America have forced capacity cuts on airlines, lacking the staff to handle the unprecedented surge in traffic.
In addition to reopening existing concessions around the world, the company also made solid progress in opening new ones in the first half: it opened 6,678 square meters of retail space, and refurbished twice as much.
By 05:10 AM ET (0910 GMT), Dufry stock was up 3.7%, outperforming both the Swiss benchmark SMI index and other European travel-themed stocks.