Richemont Reports Sales Up 10% for its Third Quarter of 2024, a Surprise in a Slow Market

It is widely known that the watch market, and most luxury markers for that matter, are facing a relatively difficult situation. According to Bain & Company Luxury Study, the global personal luxury goods market is likely to dip by 2% in 2024 – not a dramatic situation, but not a positive one nevertheless. While jewellery was the most resilient core luxury category, watches are more impacted, specifically due to a rapid slowdown in China. We have seen this with Swatch Group and LVMH, but Richemont’s Q3 results ended 31 December 2024 came as a surprise, with sales reported up 10% over last year, after two stable trimesters. How to explain this…?

Let’s first talk about the numbers. Richemont, owner of Cartier, Van Cleef, and many watchmakers such as Vacheron Constantin, IWC, Jaeger-LeCoultre, Panerai or A. Lange & Söhne, has seen multiple management changes recently. Nicolas Bos was appointed the new CEO of the Richemont Group, replacing Jérôme Lambert. The latter was appointed back as CEO of Jaeger-LeCoultre, while Louis Ferla, previous CEO of Vacheron Constantin, took the role of boss of Cartier, replacing Cyrille Vigneron. His position at VC is now fulfilled by Laurent Perves. More on these shakeups in these two articles here and here.

Richemont reported a first semester with flat sales at constant exchange rates and -1% at actual rates, yet profit was down 12% at constant rates and down 17% at actual rates, mostly impacted by sales of specialist watchmakers down by 17% at actual rates. This resilience in sales in a challenging environment for the luxury industry was secured by the performance of Jewellery Maisons (Cartier and Van Cleef & Arpels, in particular), up 2% at actual rates. And we have to take into account that most of the business of Richemont, for about 72-73%, now concerns jewellery brands.

Regarding Q3 2024, the group reports sales up by 10% at constant and actual exchange rates, with the group’s largest ever reported quarterly sale recorded at EUR 6.2 billion. Considering the current market situation, this surely comes as a surprise, specifically with sales down in Greater China by 18%, with weak demand in the region. Asia Pacific as a whole reports sales down 7%. Other Asian markets somehow counteracted this decrease, with Japan up by 19%. Also, sales increased by 19% in Europe fueled by higher domestic demand (end-of-year purchases) and 22% in the Americas. Sales in the Middle East also went up by 20%, all in all compensating for the losses in China.

Now looking at business areas, we can see that the specialist watchmakers (as the group calls them) report sales down 8%, yet another decrease of sales after reported down by 17% in the first semester. On the other side of the spectrum, jewellery brands reported sales up 14%, to EUR 4.5 billion, compared to EUR 867 million for watch brands – meaning that jewellery (and watches sold by these jewellery brands, like Cartier and VCA) now represents about 73% of the group’s sales, while true watch brands only account for 14% of the group’s business. Over the first 9 months of the year, sales of watches at Richemont are down 13% (EUR 2,524 million vs. EUR 2,926 million for the same period in 2023, a record year)

So what can say about this quarterly report? Well, jewellery is doing well, no doubt about this. Watches, on the other hand, are not in a good situation, specifically at Richemont, with struggling brands. Can it also be that the group somehow “forced” a lot of products to its retailers at the end of the year…? It’s also something to take into account and we’ll wait for the yearly results in April 2025 to draw some final conclusions.

For more details, please visit www.richemont.com.