Luxury goods conglomerate Richemont (CFR.S) has exceeded market expectations, reporting robust sales figures for the three months ending March 31. The surge in demand for jewelry and watches from Chinese consumers played a significant role in this positive performance, propelling the company’s shares to reach record highs.
At constant rates, sales for the owner of renowned brands like Cartier and Van Cleef & Arpels experienced a remarkable 22% growth. This surge was primarily fueled by strong performance in the Asia Pacific and European markets, alongside notable growth in the United States.
During a call with journalists, Chairman Johann Rupert remarked, “China is doing much better.”
In response to the favorable results, Richemont shares saw an early trade increase of over 5%, ultimately reaching a record high of 158.50 Swiss francs ($178.31).
Leading players in the luxury sector, including LVMH (LVMH.PA) and Hermes (HRMS.PA), the maker of Birkin bags, have also reaped the benefits of China’s economic rebound after three years of disruptions and closures due to COVID-19 lockdowns. This is reflected in their impressive first-quarter global sales growth rates of 17% and 23%, respectively. Notably, they stood out as some of the top-performing stocks on Europe’s blue-chip index.
Analyst Jean Philippe Bertschy from Vontobel observed that Richemont’s sales surpassed even the highest market estimates. This trend suggests an ongoing divergence in performance between the most robust labels and those facing challenges, a phenomenon that has been exacerbated by high inflation.
Richemont, which also oversees watch labels IWC and Vacheron Constantin, reported a notable 34% increase in operating profit for the fiscal year ending in March, reaching 5.03 billion euros ($5.54 billion) with a margin of 25.2%. These figures surpassed analyst expectations.
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