Richemont's Q4 Sales Surge 7% on Jewelry Demand

Richemont, the parent company of Cartier, reported a stronger-than-expected fourth-quarter sales performance, driven by robust demand for jewelry from affluent consumers who continued to spend despite global economic uncertainties. The Swiss luxury goods group's revenue for the quarter grew by 7% year-over-year to 51.7 billion euros, surpassing analysts' expectations of 49.8 billion euros.

The growth was primarily led by the company's jewelry brands, which include Cartier, Van Cleef & Arpels, and Buccellati, all of which saw double-digit increases in sales. However, the professional watchmaking division, which includes brands like Piaget and Roger Dubuis, experienced a decline in sales, largely due to a sluggish market in the Asia-Pacific region.

For the full year, Richemont's sales increased by 4% to 214 billion euros, slightly above analysts' forecasts of 213.4 billion euros. Excluding the Asia-Pacific region (not including Japan), all other regions saw year-over-year sales growth. The Asia-Pacific region, which is Richemont's largest market, saw a decline in sales, with China's market experiencing a 23% drop. In contrast, Japan's market benefited from strong domestic consumption and tourism spending, as well as a weaker yen, resulting in a 25% increase in sales when adjusted for actual exchange rates.

Richemont's Chairman, Johann Rupert, noted in a statement that the group's overall performance was solid, driven by significant growth in its jewelry brands and retail business, as well as improvements in its "other" business segments, which include the pre-owned watch retailer Watchfinder & Co. However, Rupert also cautioned that ongoing global uncertainties would require the company to maintain a high degree of flexibility and discipline.

Despite facing global challenges such as fluctuations in gold prices, U.S. tariffs, and currency volatility due to the strengthening Swiss franc and weakening U.S. dollar, Richemont's pricing power is seen as a potential mitigating factor. Analysts suggest that the company's pricing strategy, product mix optimization, and improved capacity utilization could offset half of these adverse factors.

Richemont had previously reported a record quarterly sales figure of 62 billion euros in January, which was seen as a positive sign for the struggling luxury goods industry. However, the looming threat of U.S. trade tariffs and subsequent economic uncertainties have once again cast a shadow over global consumer confidence and discretionary spending.