Richemont's Sales Surge Despite China Slowdown

Richemont, the Swiss luxury goods conglomerate that owns brands like Cartier and Van Cleef & Arpels, reported a strong performance in the December quarter, with sales rising 10% at constant exchange rates and 11% at actual exchange rates. The company's sales reached a record €6.2 billion in the quarter, driven by double-digit increases in the Americas, Europe, Middle East & Africa, and Japan. Despite ongoing weakness in the Chinese market, Richemont's sales growth was underpinned by several factors.



The Americas saw a 22% increase in sales, led by strong local demand. Europe recorded a 19% rise in sales, fueled by higher domestic demand and tourist spend, notably from North American and Middle Eastern residents. Japan experienced a 19% overall increase in sales, driven by both tourists and locals. The Middle East & Africa region saw a 20% increase in sales, led by the UAE and higher tourist spend.

Richemont's Jewellery Maisons, which include brands like Cartier, Van Cleef & Arpels, and Buccellati, saw their growth accelerate to +14% compared to the prior-year period. This was fueled by the performance of iconic Jewellery and Watch lines supported by novelties, which met a strong success, particularly during the festive season. The Specialist Watchmakers segment moderated its rate of decline to -8% in Q3, compared to a 16% rate of decline seen in the first half of the year. The Group's Other business area, which includes Fashion & Accessories Maisons, recorded a rise in sales of 11% compared to the prior-year period.



Retail sales increased by 11%, with growth in almost all regions, led by the Jewellery Maisons. This further raised its contribution to 71% of Group sales, demonstrating the success of a direct-to-client strategy. The company's strong performance in the December quarter highlights the resilience of the luxury goods market, with consumers continuing to spend on high-end products despite macroeconomic uncertainties.

In conclusion, Richemont's sales rise of 10% in the December quarter, despite ongoing weakness in the Chinese market, can be attributed to strong performance in other regions, acceleration in Jewellery Maisons, retail channel performance, and improvement in Specialist Watchmakers. The company's robust performance indicates that the luxury goods market remains resilient, with growth driven by resilient consumer spending, strong demand from emerging markets, successful marketing and product strategies, and robust e-commerce growth.