Swiss luxury giant Richemont saw a significant surge in its stock price on Thursday, January 16, after reporting stronger-than-expected sales in the final quarter of 2024. The company’s revenue, particularly from its flagship Cartier and Van Cleef & Arpels brands, exceeded analyst expectations, driven by strong demand in the United States.
Richemont’s jewellery division, the heart of its business, posted €4.5 billion (US$4.62 billion; S$6.33 billion) in sales for the quarter, marking a 14% like-for-like increase from the previous year. This exceeded forecasts and contributed to a 10% rise in total group revenues, reaching €6.2 billion, well above analyst projections of just a 1% increase. The company’s impressive growth was largely fueled by double-digit sales increases in the Americas and Europe.
Shares of Richemont surged 16% in early trading, while major competitors LVMH, Hermes, and Kering saw their stocks rise between 5% and 9%.
Richemont’s positive earnings report sets an optimistic tone for the luxury industry’s earnings season, suggesting a rebound from earlier challenges in 2024, especially in the US market. This follows a broader adjustment within the sector after the peak of the Covid-era luxury boom, with a marked divergence in performance among different brands.
Despite Richemont’s overall strong performance, its sales in greater China continued to face challenges, with a decline of 18% in the region. However, this was an improvement over previous quarters. The company’s specialist watchmaking division, hit by the downturn in the Chinese market, saw an 8% decline in sales, though this was less severe than the double-digit drop anticipated by analysts.
The report points to a potential turning point for the global luxury sector, suggesting that while the Chinese market remains sluggish, the US market’s recovery is boosting sales across several luxury brands. Analysts from HSBC noted that Chinese consumption had stabilized, while American luxury consumption had seen a notable rebound since the November 2024 elections.
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