Richemont, the Swiss company known for its high-end brands such as Cartier, Piaget, and IWC, has reported a remarkable 10% increase in sales during its fiscal third quarter, raising optimism about the potential recovery of the luxury goods sector.
The company’s performance exceeded analysts’ expectations, signaling a potential turnaround for an industry that has been struggling with slow growth and reduced demand in recent years.
For the three months ending in December, Richemont’s sales reached 6.2 billion euros ($6.37 billion), surpassing the anticipated 1% growth and marking the highest-ever quarterly sales for the company. This strong result has driven a surge in Richemont’s share price, which rose by 17%, and has helped lift shares of other luxury companies such as LVMH, Kering, and Swatch, all of which saw gains of 7% or more.
Despite a challenging environment for luxury goods—especially in China, where sales in the Greater China region fell by 18%—Richemont’s sales were bolstered by strong demand in the Americas and Europe. In particular, US and European sales surged, driven by both local demand and robust tourism. The company’s jewelry division, including the iconic Cartier brand, performed exceptionally well, with a 14% increase in sales, compensating for a weaker performance in watches, which saw an 8% decline.
Analysts are optimistic that these results may signal a recovery for the broader luxury goods sector. Bernstein analyst Luca Solca noted that Richemont’s performance is a positive sign for the sector, especially as other markets, including South Korea, saw growth while China remains a challenge. Kepler Cheuvreux analyst Jon Cox expressed cautious optimism, stating that while it may be too early to declare a full recovery, the results are “certainly very encouraging.”
With input from Reuters, Bloomberg, CNBC, and Market Watch.
