Richemont sales rise 20% as jewelry demand defies luxury slowdown

Key Takeaways:

Richemont reported 20% sales growth, beating consensus estimates
Jewelry segment led gains at Cartier and Van Cleef & Arpels
Results signal resilience in high-end spending despite sector volatility

Richemont, the Swiss owner of Cartier and Van Cleef & Arpels, reported a 20% increase in first-quarter sales, beating analyst expectations as demand for high-end jewelry and watches held up against a broader luxury market slowdown.

"The group's performance reflects the enduring strength of our Maisons and the desirability of our jewelry and watchmaking creations," Chief Executive Officer Jerome Lambert said in a statement. "We continue to see strong demand from both loyal clients and new customers across regions."

Revenue rose to about 5.7 billion euros ($6.2 billion) in the three months through June, the Geneva-based company said Wednesday. Analysts had expected growth of about 15%, according to consensus estimates compiled by Bloomberg. The jewelry division, which accounts for the bulk of group profit, posted sales growth of 22%, driven by Cartier and Van Cleef & Arpels. The specialist watchmakers division, which includes IWC and Piaget, rose 14%.

The results offer an early read on the health of the luxury sector ahead of earnings from larger rivals LVMH Moet Hennessy Louis Vuitton SE and Kering SA later this month. Richemont's performance contrasts with a more cautious tone from some peers, as aspirational shoppers in China and Europe pull back spending while the ultra-wealthy continue to buy at elevated price points.

Watches of Switzerland Group Plc, the UK-based Rolex retailer, last week reported a 76% jump in annual profit, with US sales surging 24% as affluent American shoppers fueled demand. Sotheby's also posted record first-half sales of $4.4 billion, with watch sales rising 64% and jewelry up 13%.

Richemont shares have gained about 18% this year, outperforming the Stoxx Europe 600 Personal & Household Goods Index. The company did not provide formal guidance for the full fiscal year.

The sales beat suggests Richemont's focus on the highest-end clientele is insulating it from the uneven recovery in Chinese demand that has weighed on mass-market luxury brands. Investors will watch LVMH's quarterly sales release on July 23 for further signals on whether the divergence between aspirational and ultra-high-end spending is widening.

This article is for informational purposes only and does not constitute investment advice.