By Andrea Figueras
Richemont, the Swiss luxury-goods company known for brands such as Cartier, has announced an increase in sales for its fiscal third quarter. However, it also acknowledged the slowing growth faced by the luxury sector as a whole following the post-pandemic shopping frenzy.
For the three months ending on December 31, Richemont recorded sales of 5.6 billion euros ($6.09 billion), representing an 8% increase at constant currency compared to the same period the previous year. This surpassed analysts' expectations of EUR5.49 billion according to Visible Alpha consensus.
Despite these positive results, Richemont expressed concern regarding the uncertain macroeconomic and geopolitical environment. The company witnessed a further decline in sales growth compared to the first half of the year when there was a 12% increase at constant currency. In the first quarter, sales saw a 19% rise on a year-on-year basis at constant-exchange rates.
The jewelry division, which is at the core of Richemont's business, reported sales of EUR3.95 billion for the third quarter, reflecting a 12% increase at constant-exchange rates.
Notably, the Asia-Pacific region contributed the most to group sales with a growth rate of 13%. This growth was driven by a significant 25% increase in sales in Mainland China, Hong Kong, and Macau. In contrast, Europe experienced a 3% decline in sales attributed to reduced tourist spending, despite higher sales to Chinese and domestic customers.
Richemont witnessed growth across all distribution channels, with the exception of the online retail channel where sales decreased by 5%. The company's e-commerce business Yoox Net-A-Porter (YNAP), which is presented as a discontinued operation, saw a decline in sales of 11% during the quarter. This downturn reflects the challenging environment currently faced by online distributors.
It is worth noting that Richemont recently announced it will not proceed with a planned transaction involving YNAP and the luxury e-commerce company Farfetch.
Overall, Richemont's sales performance for the fiscal third quarter highlights both positive and concerning trends in the luxury sector. The company remains cautious about the future amid ongoing macroeconomic and geopolitical uncertainties.
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