Demand for Richemont’s jewellery brands, including Cartier and Van Cleef, gave the group a boost over the Christmas period against a challenging backdrop for the luxury sector.
Sales rose 8 percent year-on-year at constant exchange rates for the three months ending December 31, 2023, reaching €5.6 billion ($6.1 billion) and beating analyst expectations. Shares surged 10 percent in early trading.
Growth was driven by strong demand in Greater China and Japan, where sales for the quarter were up 25 percent and 18 percent respectively. The group also saw sales pick up in the challenged US market, defying the broader slowdown peers are seeing in the region and helping offset a decline in Europe.
Richemont’s greater exposure to the higher-priced hard luxury sector is helping insulate it from a significant slowdown in aspirational and middle-class consumer spending that is hitting luxury sales at peers. Last week, Burberry issued its second profit warning in three months.
”This is further evidence that category leaders and self-help stories are diverging,” Bernstein analyst Luca Solca wrote in a note to clients.
The results come weeks after the group scrapped a complex deal to sell loss-making Yoox-Net-a-Porter to Farfetch. Richemont said YNAP “remains an asset held for sale” as it searches for a new controlling shareholder for the loss-making business.
Management sees “a reasonable chance” it will find a buyer within the next 12 months, chief financial officer Burkhart Grund said on a call with investors Thursday, adding that the company has already received unsolicited interest from potential buyers.
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Richemont SA will offer fresh insight on how luxury companies are coping with a sector-wide growth slump when it reports third-quarter sales on Thursday.
