Swiss luxury group Richemont, owner of Cartier, has outperformed the broader luxury sector, posting better-than-expected fourth-quarter sales fueled by strong demand for high-end jewellery. Sales rose 13% to €5.4 billion at constant exchange rates in the three months through March, powered by a 16% gain in jewellery sales.
This performance comes as many luxury shoppers shift spending from handbags and fashion to jewellery. It also helped offset a 3% decline in Middle East and Africa sales, which Chairman Johann Rupert attributed to a drop in tourist shopping due to the US and Israel's war with Iran. “Tourism has dropped to zero,” Rupert told reporters, although local consumers, especially in Abu Dhabi, continue to spend.
Richemont's operating profits for the full year came in slightly below expectations at €4.5 billion, weighed down by €164 million in one-off costs and higher raw material costs amid elevated gold prices. The company's watchmaking division saw sales rise 2% at constant rates, showing signs of recovery after a challenging two-year period.
Sales in every region except Europe and the Middle East grew by double digits, led by the US. In contrast, rivals LVMH and Kering posted only 1% and flat revenue growth, respectively. Analysts at Citigroup called Richemont's performance “standout,” noting the company is “a fundamentally stronger business than in the past.”