Editor’s Note
This article highlights how Richemont’s focus on high-end jewelry, led by Cartier, has provided a buffer against broader market headwinds, outperforming analyst expectations.
Richemont SA posted a rise in full-year sales as the continued popularity of its Cartier brand made the Swiss group more resilient than rivals like LVMH in a softening luxury-goods market.
Sales in the year ended March at Richemont’s jewellery unit, which also includes Van Cleef & Arpels, rose 8 percent at constant exchange rates, the company said in a statement Friday. Analysts were expecting a gain of 7.54 percent. In the most-recent quarter, the division’s revenue soared 11 percent.
Shares rose as much as 5.5 percent in early trading in Switzerland. As of Thursday, they had gained about 15 percent this year compared with a 17 percent drop for LVMH.
Richemont has managed to withstand the downturn in demand for high-end goods better than peers as jewelry, its biggest category, enjoys an enduring appeal with consumers even in times of uncertainty. French rival LVMH Moët Hennessy Louis Vuitton SE, which owns jewellery labels such as Bulgari and Tiffany, reported disappointing results in its most-recent quarter amid weak demand for its Christian Dior bags.
The luxury market has been struggling to emerge from a period of sluggish growth caused in part by Chinese shoppers reining in costly purchases. The industry’s outlook has grown even gloomier since US President Donald Trump last month began to impose tariffs on imports across industries and countries.
Still, Richemont, whose jewellery division generates about 72 percent of total group sales, had double-digit gains in revenue across nearly all of its markets in the most-recent quarter. Fourth-quarter group sales rose 16 percent in the Americas, 13 percent in Europe and 22 percent in Japan. While sales in the region that includes China fell 7 percent, the decline was nearly half the full year’s drop.
Richemont is looking at various options, including raising prices, to mitigate tariff pain and significant currency effects, Chairman Johann Rupert said on a call with journalists.
Richemont increased prices at its Cartier and Van Cleef & Arpels brands following Trump’s tariff hikes, according to Jefferies. The company has also had to contend with higher gold prices. Gold, considered a safe haven, has risen more than 20 percent this year amid geopolitical tensions.
Meanwhile, Rupert said he remains optimistic on China.
For the full year, the company reported operating profit of €4.47 billion ($4.48 billion), below the €4.55 billion estimated by analysts.