Richemont is starting 2025 on a high note, reporting a strong holiday season.
Growth in jewellery and in the US and Europe helped to offset continued weak demand in China for Richemont in its fiscal third quarter, ended 31 December 2024. The news sent the Swiss conglomerate’s share price up 15 per cent in Thursday’s early trading, pulling up other luxury stocks as well. LVMH and Kering’s share prices were each up 7 per cent.
Richemont sales grew 10 per cent year-on-year at constant exchange rates to €6.15 billion in Q3. It marks a return to growth after a 1 per cent decline in the previous quarter and comes as a reassuring sign for the wider luxury market, which has been sinking deep into a downturn. Brunello Cucinelli — which has proved resilient throughout the slump — reported 12 per cent third-quarter growth earlier this week.
Richemont said sales in the Americas and Europe were up 22 per cent and 19 per cent, respectively. The Americas was boosted by “strong local demand”, while Europe was “fuelled by higher domestic demand and tourist spend, notably from North American and Middle Eastern residents”, the company added. Asia-Pacific fell 7 per cent, weighed down by an 18 per cent decline in Mainland China, Hong Kong and Macau combined. In Japan, sales rose 19 per cent, while in the Middle East and Africa region, sales grew 20 per cent.
By division, jewellery — which includes Cartier and Van Cleef Arpels — led the way, smashing expectations (up 4 per cent in consensus) to reach 14 per cent growth. “Jewellery impressed, led by gifting, iconic lines, improved product availability and market share gains,” wrote Citi head of luxury goods equity research Thomas Chauvet in a note. Sales in Richemont’s specialist watchmakers arm, featuring IWC Schaffhausen, Piaget and Jaeger-LeCoultre, were down 8 per cent, versus a consensus decline of 14 per cent.
Fashion and accessories maisons, including Chloé, Montblanc and Alaïa, saw a combined 7 per cent sales increase, the company said in a statement. Richemont attributed the growth to “continued progress at Alaïa and Peter Millar, as well as the added contribution of Gianvito Rossi, consolidated since 1 February 2024”. Richemont acquired a majority stake in the Italian shoemaker in July 2023.
Yoox Net-a-Porter Group (YNAP) — which Richemont has agreed to sell to Mytheresa, and is presented in the earnings as “discontinued operations” — saw sales drop 15 per cent in the third quarter. The Mytheresa deal is expected to close in the first half of the 2025 calendar year.
“We take this [performance] as an encouraging sign and a confirmation, as anticipated by the market in recent weeks, that the third quarter of 2024 may have been a trough,” said Bernstein luxury goods analyst Luca Solca.
“The read across to the wider sector should see strength across the board and this will add to the debate that the more premium luxury brands are likely to outperform, the luxury slowdown is more cyclical than structural (at least at the high end) and that there is enough growth in the rest of the world to offset weakness in China,” Deutsche Bank analysts wrote in a note.
Comments, questions or feedback? Email us at feedback@voguebusiness.com.
More from this author:
Six reasons why Hermès is bucking the luxury slowdown
The buzziest fashion moments that defined 2024
‘We have a global message’: Willy Chavarria on his Paris debut
