16 January 2025
If you are covering Richemont’s latest results, please see the following comments from Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
"Richemont, the owner of brands such as Cartier and Van Cleef, kickstarted the reporting season for luxury companies this morning on an exceptionally high note. Third-quarter organic sales, which cover their quarter ending in December, grew by 10%, significantly beating the consensus expectation of 1% growth. This has been driven by a marked improvement across all divisions.
"The largest and most profitable division, Jewellery Maisons, delivered organic growth of 14%, beating consensus by 10 percentage points, and this too against a very strong comparison. Performance reflects strong demand for brands such as Cartier, Van Cleef, and Buccellati, supported by novelties that were popular over the festive period, with the strongest contribution coming from the Americas and Europe.
"Elsewhere, Specialist Watches, which has been quite weak given its high exposure to China, saw its rate of decline moderate, with sales growing in all regions except for Asia Pacific. Finally, the ‘Other’ division, which includes fashion and accessories, recorded a rise of 11% thanks to strong momentum in brands such as Alaia and Peter Millar.
"All regions showed double-digit growth except Asia Pacific, driven by continued weakness in Mainland China which was down 18%. In Europe, the region was fuelled by higher domestic demand and tourist spending, notably from North American and Middle Eastern nationalities. This demand was also reflected in the Americas, with strong demand from locals, while Japan and the Middle East also benefited from higher tourist spending.
"So, a stellar performance this morning from Richemont. It is hard to tell whether this performance reflects Richemont accelerating their share gains in the branded jewellery market, or if it is a reflection of demand in the broader luxury goods market, or both.
"There will be questions on investors’ minds about whether we have reached the trough, but for today, expect positive share price reactions across the sector."
