Luxury goods group Richemont, known for its ownership of Cartier, reported nearly flat sales for the quarter ending in June, attributed mainly to a significant drop in demand from China. The company’s results slightly missed market expectations.
In constant currency terms, Richemont’s sales rose by 1% to €5.3 billion ($5.77 billion), contrasting sharply with a 19% growth recorded in the same period last year. This performance highlights the brand’s resilience amidst a “continuing uncertain macroeconomic and geopolitical environment.”
The reported figures fell short of the anticipated 2% growth in constant currency, as per forecasts by Visible Alpha. When accounting for current exchange rates, sales reflected a decrease of 1%.
The company noted that while all regions experienced growth, the Asia Pacific market faced an 18% contraction. This decline was primarily driven by a staggering 27% drop in sales across China, Hong Kong, and Macau, despite stronger performances in South Korea and Malaysia.
This sales report follows a challenging earnings season for European luxury brands, marked by a notable sales slump at Swiss watchmaker Swatch and a profit warning from Burberry, which negatively impacted their stock prices.
Commenting on the situation, Jefferies noted that Richemont’s results might be seen as a relief, especially following Swatch’s disappointing figures reported just a day earlier. In Europe, Richemont’s sales grew by 5%, and the Americas saw a 10% increase, attributed to robust domestic demand across various distribution channels. Japan experienced the most significant growth, with sales soaring by 59%.
