Richemont reports 6% rise in sales as jewellery defies luxury slowdown
Sales for the first quarter to the end of June increased by 6% in constant currency terms to 5.4 billion euros, in line with consensus forecasts compiled by Visible Alpha, cited by HSBC analysts.
An 11% rise in sales of jewellery stood out, while its watches division, which includes labels Vacheron Constantin and Jaeger LeCoultre, came under pressure, with sales down 7% year-on-year. That still marked a slight improvement from an 11% decline in the previous quarter.
The Swiss watch industry is under pressure, facing uncertainty over potential U.S. tariffs and a broader decline in global demand. Exports are on track to hit their lowest levels since the pandemic in 2020.
Jean-Philippe Bertschy of Vontobel described the results as reassuring, citing the "dominance and robust growth" of Richemont's jewellery division, which continued to outperform market expectations. Bertschy also noted early signs of stabilisation in Asia, particularly in China.
By region, sales in the Americas, principally the U.S. market, rose 17%, beating HSBC's forecast for 12% growth, while sales in Asia were flat as a 7% decline in China, Hong Kong and Macau was offset by brisk business elsewhere in the region.
Richemont, which caters to the upper tier of luxury clients, has outpaced rivals such as LVMH (LVMH.PA), opens new tab as the industry faces a prolonged slump, weighed by volatile economic conditions in the U.S. and a downturn in China.
The group also benefits from its focus on jewellery, which has become increasingly attractive to affluent consumers, who are turning away from handbags and other luxury goods that have seen steep price hikes, instead opting for timeless, investment-grade pieces.
Sales of luxury goods worldwide fell by 1% last year and are forecast to drop between 2% and 5% this year, according to estimates from Bain & Co.
Richemont shares were up 1.9% at 0723 GMT, after rising as much as 2.4% in early trading. Including today's rise, the stock has gained 9% year-to-date, while shares of rival LVMH, which owns jewellery labels Bulgari and Tiffany & Co., are down over 25% since the start of the year.
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