Editor’s Note
This article highlights how Richemont’s focus on high-end jewelry, led by brands like Cartier, is providing a buffer against broader market headwinds, outperforming analyst expectations and larger rivals.
Bloomberg — Richemont SA reported an increase in its annual sales as the enduring popularity of its Cartier brand made the Swiss group more resilient than rivals like LVMH in a slowing luxury goods market.
Sales in Richemont’s jewelry division, which also includes Van Cleef & Arpels, for the fiscal year ended in March rose 8% at constant exchange rates, the company said in a statement on Friday. Analysts had expected a 7.54% increase. In the most recent quarter, the division’s revenue surged 11%.
The stock rose as much as 5.7% in early trading in Switzerland. As of Thursday, it had gained about 15% this year, compared with a 17% decline for LVMH.
Richemont has managed to withstand the downturn in demand for luxury items better than its competitors, as jewelry, its most important division, is less vulnerable to economic downturns and fashion whims. Furthermore, revenue has been boosted by the influx of precious metals during times of uncertainty and price increases.
In contrast, its French rival LVMH Moët Hennessy Louis Vuitton SE, owner of jewelry brands like Bulgari and Tiffany but heavily reliant on more economically sensitive products like handbags and clothing, reported disappointing results in its latest quarter.
The luxury market has struggled to emerge from a period of slow growth, partly caused by Chinese buyers moderating their spending on expensive items.
The sector’s outlook has become even gloomier since US President Donald Trump began imposing tariffs on imports across all sectors and countries last month.
However, in a call with journalists, Richemont Chairman Johann Rupert expressed optimism about both key markets, stating that he foresees an eventual recovery in China and that the US was using tariffs transactionally to correct imbalances that need to be addressed.
The group, whose jewelry division generates approximately 72% of total group sales, recorded double-digit revenue increases in nearly all its markets during the last quarter. Group sales in the fourth quarter rose 16% in the Americas, 13% in Europe, and 22% in Japan. While sales in the region including China fell 7%, the decline represented almost half of the full-year drop.
The company is considering several options, including raising prices, to mitigate the impact of tariffs and significant currency effects, Rupert said.
Richemont raised prices for its Cartier and Van Cleef & Arpels brands following Trump’s tariff increase, according to Jefferies. The company has also had to contend with rising gold prices. Gold, considered a safe-haven asset, has risen more than 20% this year amid geopolitical tensions.
For the full year, the company reported an operating profit of 4.47 billion euros ($4.48 billion), below the 4.55 billion euros estimated by analysts.
