Dive Brief:
- Jewelry continues to be a bright spot for Richemont and was a driving force for the company’s total revenue increase in Q1, according to an earnings release Wednesday. The company’s overall revenue increased 3% to 5.4 billion euros, or about $6.3 billion.
- Sales at Richemont’s jewelery houses, including Cartier and Van Cleef & Arpels, increased 7% year over year, while its specialty watchmaker division fell 10%.
- However, the Switzerald-based luxury goods company’s “other” category, which includes fashion and accessories brands Chloé, Alaïa and Gianvito Rossi, fell 4%.
Dive Insight:
Though Richemont is among the first to report in an upcoming slew of luxury earnings, it’s likely the company will continue to outperform its peers, said Jelena Sokolova, senior equity analyst at Morningstar Research Services, in a client note.
“Jewelry is one of the fastest-growing, very moaty luxury niches, and Richemont holds the industry’s strongest brands — Cartier and Van Cleef & Arpels, which should continue securing its lead,” Sokolova wrote. “We believe that recently, jewelry sales were boosted by a relatively better value proposition versus leather goods, as jewelry brands were less aggressive with price increases after covid.”
Jewelry, which is the group’s largest and most profitable division, has been a consistent bright spot for Richemont over the past several quarters, but Wednesday’s results also saw a significant sales increase in the Americas region, per Sokolova.
Sales in the region grew 10%. This growth has been ahead of its luxury peers for several quarters, Sokolova said, and Richemont has yet to be hit by deceleration in the region.
In both Europe and the Middle East and Africa regions, sales grew 11%. In the Asia Pacific region, however, sales decreased 4%. Japan was especially hard hit, with a 13% revenue decrease.
Richemont credited the increases across its distribution channels to the jewelry houses. Both retail and online retail revenue increased 3%, while wholesale and royalty income increased 2%.
At the end of the quarter, Richemont had a net cash position of 7.4 billion euros, which included the results of the sale of the Yoox Net-A-Porter business to Mytheresa in April.
