Swiss luxury goods conglomerate Richemont has recently released its semi-annual results, showing a slight underperformance compared to expectations. The company reported a profit of €1.51 billion ($1.76 billion), falling short of the projected €2.17 billion ($2.53 billion) predicted by analysts. Nevertheless, Richemont experienced a 6% increase in revenue over the last six months, reaching €10.22 billion ($11.94 billion) compared to the previous year’s €9.68 billion ($11.31 billion).
Richemont, known for its esteemed luxury brands including Cartier, Piaget, and Van Cleef & Arpels, faced financial results that aligned with the slowdown witnessed in the luxury sector in recent months. The group attributes this phenomenon to inflationary pressures, the deceleration of economic growth, and rising geopolitical tensions, all of which have had a detrimental impact on consumer confidence.
Despite overall growth, Richemont observed a decline of 3% in watch sales, generating revenue of €2.0 billion ($2.33 billion) in comparison to the prior year. Conversely, jewelry sales experienced a noteworthy increase of 10%. The company explained that this surge can be attributed to increased investments in manufacturing, distribution, and communication aimed at bolstering its development.
The Asia-Pacific region emerged as a crucial contributor to Richemont’s growth, particularly with the reopening of borders in China, where sales soared by 14%. However, the Americas region experienced a 4% decline in sales.
These results reflect a broader trend of decelerating growth in the luxury goods market. LVMH, the sector’s largest company, reported a 9% increase in the third quarter, significantly lower than the 17% growth achieved in the first half of 2023. Kering, the luxury group led by François-Henri Pinault, faced even greater challenges, with a 9% decrease in activity in the third quarter, amounting to €4.46 billion ($5.21 billion) at constant exchange rates.
Useful links:
1. Reuters: Slowdown in Watch Sales Hits Richemont’s Semi-Annual Results
2. Statista: Revenue of the Luxury Watch and Jewelry Sector Worldwide by Category
