By Shares in Richemont, the Swiss luxury-goods company, surged in early trade following the release of its fiscal third-quarter sales figures. Despite a slight slowdown and dampened sentiment in the sector, Richemont demonstrated resilient growth.
As of 0835 GMT, shares were up 8.2% at CHF114.05.
During the three months ending December 31, Richemont recorded sales of €5.6 billion ($6.09 billion). This represents an 8% increase at constant currency rates compared to the same period last year. In the first half of the fiscal year, the company achieved sales growth of 12% at constant currency rates.
Citi analysts Thomas Chauvet and Lorenzo Bracco commented in a note to clients that Richemont’s third-quarter sales are expected to reassure investors, particularly after volatile results from other luxury brands such as Hugo Boss and Burberry.
Although sales growth has continued to slow, Richemont’s results surpassed analysts’ estimates for the third quarter (Visible Alpha consensus projected sales of €5.49 billion).
Bernstein analysts noted that Richemont’s top-line growth during the crucial calendar fourth quarter comfortably exceeded market expectations. They emphasized the resilience of the company’s core jewelry maisons, with sales reaching €3.95 billion for the quarter.
Jefferies analysts added that the strong performance in jewelry sales, which saw a 12% increase at constant exchange rates, confirms the category’s resilience. Richemont reported progress in nearly all channels and regions, with solid sales in both jewelry and watches.
Regarding the divergence between category leaders and self-help stories, Bernstein analysts cited Burberry’s recent trading update as an example. Burberry experienced a decrease in sales and lowered its guidance, highlighting the contrasting performance of luxury brands.
The luxury industry continues to witness normalization trends in sales growth following a period of post-pandemic optimism. Inflation and high interest rates are putting pressure on consumer spending.
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