Editor’s Note
Richemont’s latest results highlight a strategic shift within the luxury sector, where the enduring appeal of high jewelry is proving a vital counterbalance to softer demand in watches. This divergence underscores the importance of diversified brand portfolios in navigating uneven market conditions.
Strong Jewelry Performance Offsets Watch Decline
Swiss luxury conglomerate Richemont reported a 4 percent year-on-year sales increase at constant exchange rates to €21.4 billion for the year ended March 31, 2025. This growth was driven by a robust performance from its jewelry brands, which offset a decline in the watches division.
Polarized Market Performance
Sales rose 7 percent in the fourth quarter at constant rates, positioning Richemont among the winners in a polarized market. In comparison, Prada Group was up 13 percent, Hermès grew 7 percent, and Moncler’s sales rose 2 percent. Conversely, Kering sales were down 14 percent, LVMH’s fell 3 percent (with watches and jewelry flat), and Valentino’s were down 2 percent. The news sent Richemont shares up 5 percent in Friday morning trading.
Divisional Breakdown
Sales at Richemont’s jewelry division, which includes Cartier, Van Cleef & Arpels, and Buccellati, continued to outperform, growing 11 percent in Q4. Meanwhile, sales at specialist watchmakers, housing brands like Vacheron Constantin and Piaget, were down 11 percent. ‘Other’ businesses, including fashion brands Chloé and Alaïa, were up 7 percent.
“There are very good dynamics around our various jewelry maisons — Cartier, Van Cleef & Arpels, Buccellati or Vhernier — which we just integrated,” Richemont CEO Nicolas Bos said during a press call. “We see a very active and positive market around these maisons. We don’t know what the year that’s upcoming is going to look like, but last quarter was a good signal.”
Geographic Performance
By geography, Japan, the Americas, the Middle East, and Europe led growth for Richemont in Q4 (up 22 percent, 16 percent, 14 percent, and 13 percent, respectively), while Asia-Pacific decreased 7 percent.
“Growth in Europe, the Americas and Japan were notably stronger than expected, offsetting lower-than-expected growth in Asia-Pacific,” wrote Bernstein luxury goods analyst Luca Solca.
Outlook on China and Pricing Strategy
Richemont chair Johann Rupert predicted back in 2023 that recovery in China was a long way off. On Friday, he said:
“[The Chinese] have not yet entered the luxury goods market in a meaningful way, and we still have relevance there as luxury goods manufacturers — and we have a very high reputation that we built up over the years. I expect that when the consumers get a little bit more confident, things will return to normal […] When? I don’t know, but I do expect that China will be back.”
Asked to comment on US tariffs during the press call, CFO Burkhart Grund said:
“We are closely monitoring the situation. We are looking at all different options that we have to mitigate the impact. Those include our thoughts on pricing.”
Richemont has a global pricing policy and has been more cautious on price increases than some of its peers.
“Many brands went too high, too quickly in terms of price points,” says Erwan Rambourg, HSBC global head of consumer and retail research; against this backdrop, Richemont still has room for uplifts.
“We, in the last three or four years, have been more cautious in ramping up our prices than some of our competitors,” Rupert told journalists. “Ultimately, you’re dealing with long-term-standing clients who have trust in the relationship. We need universal pricing, otherwise people travel to use the pricing differential like what happened when the Japanese yen was particularly weak a while ago. And I think it has benefited us. There is a bit of a backlash against some of the price increases among some of our competitors.”
He added that sharp price increases are not on the cards.
“We will continue doing fair pricing,” he said. “We will not make sudden rapid price increases, but obviously looking at currencies, which may move quite substantially in the next year or two.”
Citi managing director Thomas Chauvet wrote in a note:
“We expect consensus for group sales in fiscal 2026 of €22.6 billion, up 6 percent at constant exchange, and an EBIT of €5 billion to be reduced by low-single-digit percentages, reflecting gold, Swiss francs and tariffs headwinds.”
