LONDON – Richemont’s holiday season was exceptionally merry with sales up 11 percent at constant exchange to 6.4 billion euros. At actual exchange rates they were up 4 percent against tough comparisons from last year, soaring raw material prices and weak demand for luxury.
In the third fiscal quarter ended Dec. 31, the parent of Cartier, Van Cleef & Arpels, IWC and Chloé saw growth across all product categories. Jewelry, as always, led the way while watches notched their second consecutive quarter of growth at constant exchange rates, despite a host of macro-economic challenges.
All regions grew at constant exchange, with Asia-Pacific the only one posting a small decline at actual rates.
Richemont outstripped analysts’ expectations once again. Bernstein’s Luca Solca said jewelry in particular is in “strong shape, and Richemont dominates it with its brands.”
He added that the group has the ability to “navigate a polarized social environment and keep both aspirational and high-end consumers under the same roof.”
That is the holy grail for the big groups, which have been scrambling to lower their entry prices to attract aspirational consumers turned off by the spiraling cost of luxury goods post-pandemic.
RBC’s Piral Dadhania said the third-quarter revenue was 2 percent ahead of consensus, with jewelry in particular outstripping expectations. The specialist watchmaking division was “much better than expected,” rising 7 percent versus consensus projections of a flat performance.
“Richemont has set a high bar to kick off this earnings season,” Dadhania said.
By category, jewelry led the way, rising 14 percent to 4.79 billion euros, while sales at the specialist watchmakers were up 7 percent to 872 million euros. Sales in the “other” business area, which includes fashion, were flat against tough comparisons last year.
Sales at the fashion and accessories maisons in particular were up 3 percent with Peter Millar and Gianvito Rossi notably showing “solid momentum,” according to Richemont.
All regions grew, with the Middle East and Africa, and Japan, delivering growth of 20 percent and 17 percent respectively. The Americas were up 14 percent, followed by Europe which rose 8 percent.
Asia-Pacific, which began showing signs of recovery in the first half, rose 6 percent, although at actual rates they were down 2 percent. Richemont said a “solid” performance in Hong Kong helped to drive sales in China in particular.
The group said its net cash position on Dec. 31 was 7.6 billion euros, compared with 7.9 billion euros in the corresponding period last year.
