Editor’s Note
Richemont’s latest results show resilient holiday demand for high-end jewelry and watches, particularly in the U.S., outperforming market expectations.
Bloomberg — Richemont’s customers splurged on Cartier watches and jewelry during the holidays, particularly in the U.S., despite broader concerns persisting in the luxury market.
The Swiss luxury group reported on Thursday that sales at constant exchange rates rose 11% to a record in the third fiscal quarter. This figure surpassed the 7.5% estimated by analysts, while the 14% growth in the jewelry division also exceeded expectations.
Richemont has weathered the luxury sector downturn better than most of its rivals because its high-priced rings and bracelets are often considered a better store of value than expensive clothing and leather goods.
Its third quarter is typically the strongest due to holiday spending.
This is likely to temper optimism, especially after the company said it faced higher raw material costs and warned about the effects of currency exchange weighing on margins.
Demand also remained moderate in mainland China, which is likely to cool hopes for a broader rebound. The return to sales growth was mainly driven by Hong Kong, while Citigroup analyst Thomas Chauvet stated there was “an improvement in the quality of demand in major Chinese cities and among high-end customers.”
In Richemont’s latest quarter, demand was strong in the Americas, while tourists from the Middle East fueled sales in Europe, according to the company. Japan also performed better, with a 17% increase.
All divisions generated growth, including the specialist watchmakers with a 7% sales increase, a strong figure given the recent overall weakness in the watch market.
Cartier is experiencing a strong popularity boost as celebrities like Taylor Swift and Timothée Chalamet turbocharge the desirability of its diamond-encrusted jewelry and watches.
