Richemont Shares Slide as Cartier Jewellery Growth Slows

Shares in Cartier owner Richemont fell sharply in Zurich on Friday after the Swiss luxury group posted a jump in half-year profit but slower jewellery growth in its second quarter, Reuters reported. The stock dropped as much as 9% during the session and was down 4.7% at 1045 GMT.

Net profit for the six months to September rose to €2.53 billion from €1.81 billion a year earlier, ahead of the €2.26 billion analysts had forecast, according to Reuters. AFP, in a report carried by FashionUnited, put the increase at 39%, with half-year revenue up 16% to nearly €12.3 billion.

Jewellery growth slows

Group sales in the three months to the end of September grew 13% to €5.95 billion, beating the Visible Alpha consensus of €5.89 billion but easing from 20% growth in the first quarter, Reuters said.

Jewellery, the division that includes Cartier, grew 14% at constant currency to €4.41 billion in the quarter. That fell short of the 16% expected in an RBC poll, and the report said the figures raised fears of a slowdown in the segment. Watchmaking sales rose 12% to €833 million in the quarter.

For the full half, AFP said jewellery sales climbed 18% to €9.1 billion and watchmaking rose 9% to €1.7 billion. Other businesses, including Chloé, Alaïa, Montblanc, Delvaux and Gianvito Rossi, grew 9% to €1.4 billion. An AWP poll had expected revenue of €12.26 billion, jewellery of €9.26 billion and watchmaking of €1.64 billion.

Regions and China

Excluding currency effects, half-year sales rose 23% in the Americas, 30% in Japan, 16% in Asia-Pacific and 13% in Europe, while the Middle East and Africa slipped 2%, AFP reported. In the second quarter, sales in the US, Japan and Europe each grew by 15% or more, while mainland China was described as soft but stable, according to Reuters.

Chief executive Nicolas Bos said long-term jewellery trends remained positive, with sales driven by volumes rather than price alone. He said tourism now accounts for about 15% of sales, half its pre-COVID share, making the business “very much a domestic-driven business these days.”

Chairman Johann Rupert said the group had pricing power but did not want to be greedy, and added that China would recover, though he could not say when.

What’s next

In the results statement, Rupert said Richemont had delivered solid results in a volatile geopolitical and economic environment and expected similar conditions to persist for the foreseeable future, AFP reported.

Asked about acquisitions, Rupert did not confirm reports of talks over a stake in De Beers, telling reporters the group had not made up its mind about anything, Reuters said.

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