Richemont Q1 sales rise strongly but divisional performance is mixed

Luxury reporting season is under way and it was Swiss giant Richemont’s turn on Wednesday, the luxury powerhouse reporting a healthy quarterly sales rise in line with analysts’ expectations.

Q1 sales in the three months to the end of June rose 6% at constant currency (CCY) to reach €5.4 billion. But it wasn’t all good news — while jewellery sales were up a powerful 11%, the specialist watches division continued to struggle with a 7% sales fall and its ‘Other’ division that includes its fashion brands dipped 1%.

So let’s look at the details. Currency exchange had a negative impact overall so the 6% CCY rise was only 3% at actual exchange rates. But after the luxury slump last year, that was still encouraging in what it admitted remains a “volatile macroeconomic and geopolitical context”.

Its four Jewellery Maisons — Buccellati, Cartier, Van Cleef & Arpels and Vhernier –- were the stars and saw a third consecutive quarter of double-digit growth with sales of €3.914 billion, supported by both jewellery and watch product lines. All regions posted growth, except Japan that faced a very high comparative.

Specialist Watchmakers’ sales fell to €824 million, largely reflecting declines in China, Hong Kong and Macau combined, as well as in Japan, partly offset by double-digit growth in the Americas. 

The ‘Other’ business area’s sales may have only dropped 1% CCY but they were down 4% on a reported basis at €674 million. This unit did see “solid momentum at Peter Millar and Alaïa, an encouraging performance at Chloé and robust growth at Watchfinder & Co”. But it didn’t mention Dunhill, Delvaux, Montblanc or its remaining ‘Other’ labels.

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Meanwhile it saw double-digit growth in Europe (+11%) with sales of €1.295 billion. The pictures was also strong in the Americas (+10% reported and +17% CCY) with sales of €1.335 billion. The Middle East & Africa boomed too (+11% reported and +17% CCY) at €524 million. 

But Asia Pacific was only “stable” — that is, flat on a CCY basis but actually down 4% reported at €1.731 billion. And Japan was down on both measures (-15% CCY and -13% reported) at €527 million. As mentioned, it struggled to match high comparatives in the prior-year period.

And by distribution channel, its own Retail ops were up 6% CCY and 3% reported at €3.734 billion, while Online Retail rose by the same percentages to €323 million. And wholesale and royalty income was up 6% CCY and 2% reported at €1.355 billion.