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Swiss luxury group Richemont sparked a surge in luxury stocks on Thursday as it reported stronger than expected sales in the final three months of 2024, boosted by demand in the US for its Cartier and Van Cleef & Arpels brands.
Revenues from jewellery, the core of Richemont’s business and its biggest division, reached €4.5bn, a 14 per cent like-for-like increase on the same period a year earlier and beating analyst expectations.
Sales across all divisions rose 10 per cent to €6.2bn, well ahead of consensus analyst forecasts of a 1 per cent increase, driven by high double-digit growth in the Americas and Europe.
Shares in the group rose 16 per cent in early trading on Thursday while rival LVMH, Hermes and Kering all rose by between 5 per cent and 9 per cent.
Richemont’s sales report kicks off earnings announcements across the luxury industry, which are expected to show some improvement from earlier in 2024, helped by a stronger US market.
The industry has been going through a significant adjustment since the highs of the Covid-era luxury boom, with lower growth rates fuelling a divergence in fortunes between the strongest and weakest brands.
Luca Solca, an analyst at Bernstein, said Richemont’s results had smashed expectations, meaning “the luxury goods reporting season starts on a high”.
The strong trading update provides a reassuring early indication of the sector’s performance over the important Christmas period, which followed a tough opening nine months in 2024 as China, the industry’s previous growth engine, dragged on revenues.
Richemont’s business in greater China continued to underperform the rest of the group in the three months to December, with sales falling 18 per cent — though improving sequentially on previous quarters — compared with the same period in 2023.
Its specialist watchmaking division continued to struggle because of its exposure to the Chinese market, with sales falling 8 per cent, a less steep decline than the double-digit fall expected by analysts.
But Richemont’s overall performance, including in fashion and accessories as well as watches and jewellery, may provide an early indication that the worst of the slowdown has passed for the global luxury sector.
“We remain convinced . . . that Chinese consumption has not deteriorated further since the third quarter while American consumption of luxury has picked up convincingly since the early November 2024 election,” said analysts at HSBC.
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