Cartier owner Richemont has today reported a slightly better-than-expected 7% rise in quarterly sales as brisk luxury jewellery business in the US partly offset weaker demand for watches in Asia.
The Swiss-based company, which also owns jewellery brand Van Cleef & Arpels and watch label Piaget, said sales in its fourth quarter to end-March rose to €5.17 billion, a 7% rise in constant currencies.
That is slightly more than the 6% expected, according to a Visible Alpha consensus cited by HSBC, and slightly slower than the 10% growth rate in the third quarter.
The jewellery division posted an 11% rise in sales over the quarter, mitigating a decline, also of 11%, from the watches division, whose Chinese sales have been hit as the country’s property crisis shrank the appetite for luxury purchases.
Luxury groups started the year with hopes that robust demand in the US would lift the sector out of its biggest slump in years, but from mid-February, signs emerged of a weakening US economy and tariff announcements in April brought more uncertainty.
Richemont, which caters to extremely wealthy clientele, is viewed by analysts as more resilient to a downturn than other luxury groups that rely more on fashion sales.
“Richemont continued to gain significant market share in jewellery,” Vontobel analyst Jean-Philippe Bertschy said, noting the division accounted for 54% of sales, compared to 36% in 2019.
Bertschy also flagged what he said was spectacular growth and profit, especially when compared with competitor LVMH, which owns jewellery labels Bulgari and Tiffany, although he said Richemont was “not impervious” to the current volatile environment.
Richemont shares are up 11% since the start of the year, while shares of Hermes, which also caters to ultra wealthy shoppers, are up 14%. LVMH and Gucci-owner Kering are down 20% and 25% respectively.
Fears of a global recession have prompted downward revisions in estimates. Consultancy Bain said this week that it had lowered its annual sales forecast for global sales of luxury goods to a likely 2% to 5% drop, following the sector’s 1% decline in 2024.
