Swiss luxury group Richemont delivered a strong performance in the final quarter of 2024, surpassing market expectations and sparking a rally in luxury stocks. The company’s success was driven by robust demand for its Cartier and Van Cleef & Arpels brands, particularly in the United States.
Richemont’s jewelry division, its largest and most important business unit, reported revenues of €4.5 billion (US4.62billion;S6.33 billion), marking a 14% increase compared to the same period in 2023. This growth exceeded analyst predictions and highlighted the resilience of its high-end jewelry offerings. Overall, the group’s sales rose by 10% to €6.2 billion, significantly outperforming the 1% growth forecast by analysts. The Americas and Europe led the way, with both regions posting double-digit growth.
The positive results sent Richemont’s shares soaring by 16% in early trading on Thursday. The news also lifted shares of rival luxury giants, including LVMH, Hermès, and Kering, which saw gains of between 5% and 9%.
Richemont’s strong performance marks the start of the luxury industry’s earnings season, which is expected to show signs of recovery compared to earlier in 2024. The U.S. market has been a key driver of this improvement, offsetting challenges in other regions.
The luxury sector has been undergoing a significant adjustment since the peak of the Covid-era boom. Growth rates have slowed, creating a widening gap between the strongest and weakest brands. Richemont’s latest results, however, suggest that the industry may be turning a corner.
Luca Solca, an analyst at Bernstein, described Richemont’s performance as “smashing expectations,” adding that the luxury goods reporting season is off to a strong start. The company’s update also provides an early indication of how the sector fared during the critical Christmas period, following a difficult first nine months of 2024.
China, once the industry’s primary growth engine, continued to weigh on Richemont’s performance. Sales in Greater China fell by 18% in the three months to December compared to the same period in 2023, though this represented an improvement over previous quarters. The company’s specialist watchmaking division, which is heavily exposed to the Chinese market, also struggled, with sales declining by 8%. However, this was better than the double-digit drop analysts had anticipated.
Despite these challenges, Richemont’s overall performance—spanning jewelry, watches, fashion, and accessories—suggests that the worst of the global luxury slowdown may be over. Analysts at HSBC noted that Chinese consumption has stabilized since the third quarter, while demand for luxury goods in the U.S. has shown a convincing recovery since the early November 2024 election.
Richemont’s results offer a glimmer of hope for the luxury sector, signaling that the industry may be poised for a gradual recovery in 2024.
Related topic:
- Jamie’s Fine Jewelry to Close Permanently at End of March
- Another Smash-and-Grab Jewelry Heist Hits Niagara, This Time in Grimsby
- Gold and Pearls Shine at Japan’s Largest Jewelry Fair
