Richemont sales shine with jewellery brands
Richemont reported higher sales during the holiday shopping season as stronger-than-expected demand for its pricey jewellery in China and the US countered slowing luxury growth trends.
The Cartier owner said sales rose by 8% during the three months through December at constant exchange rates, above the 6.91% consensus estimate of analysts. Sales in China, including Hong Kong, climbed 25% while the Americas rose by 8%.
Richemont and other luxury firms have faced slowing demand for their wares as consumers pull back on big-ticket spending after years of aggressive price increases.
Sales growth slowed in most of Richemont’s divisions with the exception of jewellery.
British trenchcoat maker Burberry last week slashed its annual profit forecast after disappointing Christmas sales.
Jefferies analyst James Grzinic said Richemont’s jewellery sales performance was “resilient” and that its watches business provided “no shockers”.
At Richemont, sales from its jewellery maisons, which also include Van Cleef & Arpels, grew 12% at constant currencies to €3.95 billion (about R82 billion).
Revenue from Richemont’s luxury watches division, with brands such as Vacheron Constantin and IWC, increased 3% to €939 million (about R19.4 billion), just below expectations.
Demand for luxury watches has been weakening after an unprecedented boom during the pandemic that prompted many producers to significantly hike prices. Richemont in November reported a surprise decline in first-half profit from continuing operations as wealthy consumers reined in purchases.
Overall, Richemont sales amounted to €5.59 billion at actual exchange rates, up 4% from a year earlier and just above analysts’ estimates.
During the quarter, a deal for Richemont to sell a majority stake in its loss-making YooxNet-a-Porter online sales platform in exchange for shares in Farfetch was cancelled after the luxury portal was sold in a rescue deal to a South Korean e-commerce company. The company said online retail sales fell 5% during the quarter.