Richemont's Jewelry Sales Surge 8% Despite Market Challenges

Richemont SA reported a significant increase in full-year sales, primarily driven by the enduring popularity of its Cartier brand. The company's jewelry unit, which includes Cartier and Van Cleef & Arpels, saw an 8% rise in sales at constant exchange rates. This performance exceeded analysts' expectations of a 7.54% gain. In the most recent quarter, the division's revenue surged by 11%.

Richemont's resilience in the face of a softening luxury-goods market is notable, as it outperformed rivals. The luxury market has been challenged by sluggish growth, partly due to reduced spending by consumers. Additionally, the imposition of tariffs has further complicated the industry's outlook. Despite these headwinds, Richemont's jewelry division, which accounts for about 72% of total group sales, achieved double-digit revenue growth across nearly all markets in the most recent quarter. Sales in the Americas, Europe, and Japan saw significant increases, while the region experienced a 7% decline, which was nearly half the full year’s drop.

The company's strategy to mitigate the impact of tariffs and higher raw material costs, particularly gold, has been effective. Richemont increased prices at its Cartier and Van Cleef & Arpels brands following tariff hikes and has managed to maintain profitability through disciplined operating costs and targeted price increases. Chairman Johann Rupert expressed optimism about the market, noting that consumers there are still recovering from the pandemic but have substantial savings, which could drive future spending.

For the full year, Richemont reported an operating profit of €4.47 billion, slightly below the €4.55 billion estimated by analysts. The company's performance highlights its ability to navigate a challenging market environment and maintain strong demand for its luxury jewelry brands.