Richemont saw double-digit sales growth in all regions, with the exception of Asia-Pacific, where sales fell by 7%, mainly due to an 18% decline in mainland China, Hong Kong and Macau. However, other Asian markets showed improvements, with double-digit growth in Korea. In Europe, sales rose by 19%, boosted by increased domestic demand and tourist spending, particularly by North American and Middle Eastern residents. The Americas recorded growth of 22%, underpinned by strong local demand. In Japan, spending by tourists and locals continued to drive sales, which rose by 19%. The Middle East and Africa region saw sales increase by 20%, mainly thanks to the United Arab Emirates.

Source: Richemont

All distribution channels reported higher sales. Retail sales rose by 11%, with growth in almost all regions, led by the Jewelry Houses, which now account for 71% of Group sales. Richemont's Jewelry Houses - Buccellati, Cartier, Van Cleef & Arpels and Vhernier - saw growth accelerate to 14%, driven by the performance of iconic Jewelry and Watch lines, supported by highly successful new products, particularly during the holiday season.

Richemont's outstanding performance had a ripple effect across the luxury sector, driving up the shares of many companies in the sector on Thursday. At the time of writing, Kering was up +8%, LVMH +7.5% and Hermès +5%.

 

Compagnie Financière Richemont share price (daily data) :

Chart COMPAGNIE FINANCIERE RICHEMONT

Compagnie Financière Richemont 's results exceeded market expectations (consensus was for sales of 5.5 billion, a far cry from the 6.2 billion reported), providing a positive catalyst for investors.

Remarkable gains in jewelry came on top of a sharper-than-expected reduction in pressure in watches and progress in "soft" luxury goods, points out James Grzinic, who follows the sector at Jefferies. The strongest growth was seen in the United States, with an increase of 22%. Richemont is a top choice in the luxury sector because of its ability to absorb gross margin shocks despite challenges in watches, and to gain market share in jewelry.

Evolution of Compagnie Financière Richemont's income statement (by half-year):

income-statement-evolution-chart COMPAGNIE-FINANCIERE-RICH

All divisions exceeded analysts' forecasts. Richemont's fourth-quarter 2024 results not only strengthened the company's market position, but also boosted the luxury goods sector as a whole. These results confirm that Richemont is well positioned for further growth, despite the continuing challenges in China.