Richemont gross sales jumped to a document in the ultimate months of final yr as vacation customers splurged on its watches and Cartier jewelry, led by demand in the US and the Middle East.
Sales on a relentless forex foundation climbed 11 % in the fiscal third quarter, the Swiss luxurious group mentioned in a press release on Thursday. That beat the 7.5 % common estimate of analysts. Sales on the jewelry division rose 14 %, additionally topping expectations.
All divisions generated progress, together with specialist watchmakers with a 7 % gross sales improve — a very sturdy determine given latest weak point in the broader watch market. US tariffs, overseas alternate and rising supplies prices had lowered expectations for the unit that features manufacturers equivalent to Jaeger-LeCoultre and Piaget.
Richemont shares superior as a lot as 3 % Zurich. Peers equivalent to Swatch Group AG and Hermès International SCA additionally rose.
Through Wednesday, Richemont had climbed 26 % in the prior 12 months, outperforming France’s LVMH, the world’s largest luxurious group, which was little modified.
“Richemont sustained its growth trajectory and reinforced its leadership in the luxury sector,” mentioned Jean-Philippe Bertschy, analyst at Vontobel. While its margins and free money circulate face ongoing stress, the posh large’s model portfolio, pricing energy and balance-sheet power stand out, he added.
Richemont has weathered a downturn in the posh business higher than most of its rivals due to the attraction of its expensive rings and bracelets, which are sometimes considered as a greater retailer of worth than costly attire and leather-based items.
In the December quarter, demand was sturdy in the Americas, whereas vacationers from the Middle East stoked gross sales in Europe, the corporate mentioned.
“Richemont has set a high bar to kick off this earnings season, with a strong print against elevated expectations and tough comparatives,” RBC analyst Piral Dadhania mentioned in a observe.
Swift Effect
Cartier is experiencing a robust enhance in recognition as celebrities like Taylor Swift and Timothée Chalamet turbo-charge the desirability of its jewelry and diamond-encrusted watches.
The ultimate months of the yr are a very powerful for luxurious labels due to vacation spending, and Richemont’s efficiency might enhance hopes that the broader droop in the sector — significantly in China — is subsiding. Hong Kong gross sales lifted the corporate’s outcomes in the area, whereas Japan additionally outperformed with a 17 % improve.
Earlier this week, Brunello Cucinelli SpA posted a reassuring set of numbers in line with analysts, who welcomed a comparatively quiet launch contemplating latest volatility in the sector. The Italian model sells cashmere and vicuña bomber jackets.
By Allegra Catelli
Learn extra:
How Watchmakers Are Dealing With Soaring Gold Prices
As gold tops $4,600 per ounce, executives together with Breitling CEO Georges Kern are bracing for a success to margins. Solutions vary from looking for new supplies to elevating costs or suspending gold purchases.