Swiss luxury conglomerate Richemont, renowned for brands like Cartier and Van Cleef & Arpels, reported a 1% dip in sales to €4.8 billion for the quarter ending September 30, underperforming analyst expectations of a 2% rise. The downturn was primarily driven by a significant 18% sales drop in the Asia-Pacific region, counterbalanced by strong growth in the Americas, Japan, the Middle East, and Europe.
The group’s jewellery division displayed relative resilience, with sales up 4% to €3.44 billion, though this still fell short of anticipated growth. In contrast, Richemont's watch division struggled, with a 19% decline as demand from Chinese consumers, a traditionally robust market, remains weak.
Chair Johann Rupert noted, “We saw solid sales growth across most of our regions offsetting continued weakness in Chinese demand.” CEO Nicolas Bos added that the lack of consumer confidence in China “is probably a mid- to long-term phenomenon,” contributing to the uncertainty surrounding luxury demand in the country.
Richemont’s shares dropped nearly 4% following the news, though they remain 6% higher year-to-date, reflecting investor confidence in its jewellery brands. The results cap a tough quarter for the luxury sector as Chinese demand lags, impacting other luxury giants like LVMH and Kering. However, Hermès has managed to buck the trend, continuing its robust performance amid sector-wide headwinds.
Richemont's leadership has recently undergone extensive restructuring, with Bos taking on an expanded role as CEO, alongside new executives for Cartier and Van Cleef & Arpels. HSBC analysts view these changes and Richemont’s jewellery strength as promising long-term growth drivers despite current market challenges.
