Richemont posted group sales up 14% at constant exchange rates to €5.2 billion in the second quarter of fiscal 2026, ended 30 September, driven by strong sales at its jewelry division (up 17%, against a 10% consensus).
“Richemont smashed first-half consensus expectations,” Bernstein luxury goods analyst Luca Solca wrote in a note. “The beat is broad: on all divisions and geographies.”
Sales at the specialty watchmakers division, including IWC Schaffhausen, Jaeger-LeCoultre and Vacheron Constantin, were up 3% versus a consensus of -3%. Second-quarter sales at the conglomerate’s “other houses” division, which includes fashion and accessories brands, were up 6% versus a 2% consensus.
Asked during a media call on Friday about whether the main reason behind Richemont’s sales rise (despite the unprecedented challenges with currencies, gold prices and tariffs) was “its fabulous products”, Richemont CEO Nicolas Bos replied: “ I think our fabulous product is a good starting point. This is really the long-term view of this group. We have been building legitimacy and desirability over time in pretty much all regions. So of course we see ups and downs linked to the evolution of the economy and geopolitics, but at the end of the day, what we’ve seen now for decades and for some maisons for centuries, is that there is an attractiveness of exceptional pieces in jewelry, watches, accessories that’s quite constant.”
Cartier introduced Love Unlimited at the end of September, the latest addition to its Love collection, in the form of a flexible bracelet. Speaking of the market response, Bos noted a “very, very good reception so far and some good early results [for Love Unlimited], so we have high expectations and hopes for the festive season and Christmas gifting”.
By geography, Richemont sales in the Americas were up 20% in Q2, Europe was up 11%, Asia-Pacific increased by 10%, Japan rose by 10%, while the Middle East and Africa was up 22%.
“ You will recall a few years ago when there was general hopefulness that China would recover quickly, I noted caution, so the share price dropped — but it’s proven to be correct now. We believe that the Chinese clientele are becoming more selective and it may remain so even upon a full recovery, which we are happy about,” Richemont chair Johann Rupert told reporters.
The company noted a return to growth in China, Hong Kong and Macau in the second quarter, led by the jewelry maisons, but Rupert remains cautious: “The downtrend has changed, so we are seeing some early signs. But I wouldn’t say that they are green shoots of recovery.”
Bos noted a shift from the YOLO (you only live once) to the YONO (you only need one) mentality. “ It’s an anecdote that’s part of the conversation in Korea and China, but I think it applies to a lot of countries. YOLO was referring to the idea of instant gratification. And it has evolved toward what they call the YONO, which is in a way that they still buy, but they buy with a much more discerning eye,” he explained. “[For YONO buyers,] the interesting quality of the product, the investment or the long-lasting value really play a role. This is something that we truly see particularly for jewelry. The clientele — which is very demanding and very discerning — understands the long-term quality and value of our collections. It has been really a driving force these past few years behind the success of Richemont.”
The 39% tariffs imposed by the US on Swiss imports since August have been a blow to the Swiss watch industry. Asked for an update about the negotiations, Rupert said: “We did not negotiate in the White House. You negotiate if you have aircraft carriers, when you buy millions of tons of soybeans, that’s called negotiations. I think you’ve got to wait for the Swiss representation. They’ve been there this week. We believe that they’re doing a very good job, but we are merely businesspeople and we did not negotiate, we didn’t have a mandate to negotiate. That’s the Swiss government’s job, but I think there are signs that the misunderstanding has been cleared up.”
Richemont remains among the best in class in this season’s earnings calendar. Analysts had anticipated modest growth across this quarter’s luxury earnings, supported by the US wealth effect and a stabilization in China. Predictions have been accurate. LVMH reported a sales increase of 1% in Q3, an improvement compared with a 4% decrease in Q2. Kering sales were down 5%, compared with -15% in Q2. Hermès sales were up 9.6%, experiencing slightly increased momentum compared with the first half of the year. Brunello Cucinelli posted a 12% revenue increase. Prada brand reported sales down 0.8% and Miu Miu up 29%; Moncler -1% and Burberry reported a 2% rise in second-quarter comparable store sales.
The comparison base will be difficult for all brands in calendar Q4, considering 2024’s post-election bump, but particularly for Richemont, whose fourth-quarter sales in the Americas were up 22% last year. “Q4 was extremely strong for sure,” Bos said.
“Investor expectations have been raised post the recent luxury beats, but Richemont was suffering from margin concerns related to currency, gold prices, tariffs and a tougher comparison base than peers in the next three months,” Deutsche Bank analysts wrote in a note. “We suspect some of these concerns will melt away on this print.”
Citi managing director Thomas Chauvet wrote: “Richemont is a fundamentally stronger business than in the past: greater scale, more balanced product and geographic mix, shorter production lead times, tighter control over distribution, cleaner wholesale inventories, a stronger balance sheet, and a strengthened management team and governance.”
