Richemont Sales Bounce 10% in Q3, With Strong Gains Worldwide, Except China
Sales at Richemont surged 10 percent to 6.2 billion euros in the three months ending Dec. 31, with double-digit gains in all regions except for China, where demand continues to stagnate.
Richemont, parent of brands including Cartier, Van Cleef & Arpels and Vacheron Constantin, described the holiday trading period as “very solid,” trumpeting the numbers as the highest quarterly sales in the company’s history.
All categories, with the exception of watches, posted double-digit increases in the crucial third quarter, which takes in the holiday shopping period.
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The 10 percent spike sent Richemont shares soaring more than 16 percent to 161.80 Swiss francs in mid-morning trading on Thursday. European luxury stocks, including Kering, LVMH Moët Hennessy Louis Vuitton and Gucci, picked up the momentum, rising around 8 percent.
Sales in the jewelry division, which also includes Buccellati and Vhernier, rose 14 percent compared with a 12 percent uptick in the prior-year period. The increase in sales came both from established collections and new designs, according to Richemont.
At the specialist watchmaking division, sales grew across all regions with the exception of Asia-Pacific. Richemont said double-digit increases in the Americas, and Middle East and Africa regions, help stem sales declines to 8 percent from 16 percent in the first half of the year.
The group’s “other” business area, which includes fashion and accessories, recorded an 11 percent rise in sales, with Watchfinder & Co., which specializes in pre-owned watches, growing in the double-digits.
Fashion and accessories maisons saw their sales increase by 7 percent, due to “continued progress” at Alaïa and Peter Millar, and the contribution of Gianvito Rossi, which was consolidated on Feb. 1, 2024.
All regions showed double-digit growth except Asia Pacific, which contracted by 7 percent due to an 18 percent decline in Mainland China, Hong Kong and Macau.
Other Asian markets saw their performance improve, with positive results in most countries, and double-digit growth in Korea. In Japan, spend from tourists and locals continued to drive sales, which increased by 19 percent compared to the prior-year period.
In Europe, sales were up 19 percent, fueled by higher domestic demand and tourist spending, mainly from North American and Middle Eastern customers. Richemont said all the main countries in Europe recorded a rise in sales in the three-month period, with “notable performances” in France, Switzerland and Italy.
In the Americas, sales were up 22 percent, with increases across all business areas on the back of strong local demand. Sales in the Middle East and Africa rose by 20 percent, led by the UAE and higher tourist spending.
Bernstein’s Luca Solca said the results “smashed” expectations, with Richemont’s performance in the quarter “significantly ahead” of analysts’ forecasts.
Jefferies said the gains in jewelry were “remarkable,” with a “sharper than expected reduction in pressures in watches, and more progress in soft luxury.” The bank attributed the bounce in the Americas to post-election confidence.
The bank added that Richemont “remains the liquid, high-beta luxury name of choice. This, after ample demonstrations of its ability to prevent gross margin shocks despite challenges in watches, of ongoing strong market share gains in jewelry, and a newfound willingness to tackle underperforming brands under a new management structure.”
