Shoppers walk past the Cartier luxury store operated by C Financière Richemont SA inside the luxury department store Galeries Lafayette SA in Paris, France.
Bloomberg | Bloomberg | Getty Images
Cartier owner shares Richemont Shares soared on Thursday after the luxury goods group said sales rose 10% in the third quarter of its fiscal year, despite weighing on demand from China.
In the three months to the end of December, sales rose to 6.2 billion euros ($6.38 billion) at constant exchange rates, which the Swiss luxury brand called its “best ever” quarterly sales. That was well above the 1% increase expected by analysts in a consensus cited by RBC, Reuters reported.
Richemont shares closed 16.36% higher on Thursday.
Other luxury stocks christian dior, LVMH and hermes Stocks rose in a positive signal for the health of Europe’s luxury goods sector during the holiday season.
Richemont reported double-digit growth in all regions except Asia Pacific, where sales fell 7%, led by an 18% decline in Mainland China, Hong Kong and Macau combined.
Once a major driver of luxury goods demand, China is struggling to emerge from the macroeconomic downturn following the coronavirus pandemic, a major drag on the sector.
The Swiss company’s share price has faced volatility over the past year following management changes and increased volatility in the luxury goods market.
Shares soared after Nicolas Vos, the former head of the group’s Van Cleef & Arpels jewelery brand, was appointed as the new CEO in May. The stock price is currently up 28.75% year-over-year.
Richemont’s stock price compared to the previous year.
The results signal a return to growth for the company, which had reported a 1% year-on-year drop in sales for the first half of the year to September due to a difficult macroeconomic backdrop and difficult conditions in China. Sales for the same period amounted to 10.1 billion euros.
The luxury group had previously been an outlier in the broader luxury recession, reporting record full-year sales in May.
Luca Sorca, Bernstein’s senior global luxury analyst, said Thursday’s results were a positive early signal for a return to health across the luxury sector.
In the memo, Sorca said that Europe (excluding Greater China) and the Asia-Pacific region “both continue to show solid improvement due to increased domestic demand and an influx of tourists, while the Americas region continues to be driven by strong local demand. “It has been done,” he said.
“This is an encouraging sign and suggests that Q3 ’24 may have been the bottom, as the market has been expecting in recent weeks,” he said, referring to the third quarter of the calendar year ending in September. I take this to be evidence of this,” he added.
Citi analysts added that they expect the strong results to “support Richemont shares and the broader luxury goods sector, which has underperformed over the past 18 months.”
