Richemont’s Q2 Jewelry Sales Up 12%

Geneva—Richemont reported solid first-half results, with its jewelry brands a bright spot on the balance sheet despite a volatile macroeconomic backdrop.

“In the last months, the group has continued to be stress-tested, confronted by an unprecedented combination of external macroeconomic headwinds, including material currency movements, the rising price of gold, and the first impact of additional U.S. duties,” said Richemont Chairman Johann Rupert.

To mitigate the effects of these factors, Richemont implemented “balanced and targeted” price increases, he said.

For the first half ending Sept. 30, Richemont reported sales of €10.62 billion ($12.37 billion), up 5 percent year-over-year at actual exchange rates (10 percent at constant exchange rates).

In the second quarter, the company gained momentum, with sales increasing 8 percent year-over-year at actual exchange rates (14 percent at constant exchange rates) to €5.21 billion ($6.05 billion).

Richemont’s jewelry brands, Buccellati, Cartier, Van Cleef & Arpels, and Vhernier, performed well in the first half of the year, with a broad-based increase in demand for watches and jewelry across all regions.

First-half sales in the jewelry division were up 9 percent year-over-year (14 percent at constant exchange rates) to €7.75 billion ($9.03 billion).

In Q2, jewelry sales grew 12 percent year-over-year (17 percent at constant exchange rates) to €3.83 billion ($4.46 billion).

Buccellati’s “Opera,” “Tulle,” and “Macri” collections were top performers, alongside Cartier’s “Clash,” “Panthère,” and “Santos” collections.

Van Cleef & Arpels’ “Alhambra,” “Flora,” and “Perlée” jewelry lines also were standouts.

In the first half of the year, Van Cleef & Arpels introduced the “Flowerlace” jewelry collection while Cartier debuted the “Love Unlimited” line and a new branding campaign.

High jewelry sales increased, said Richemont, with events held in Europe and Asia for Cartier’s En Équilibre” line and Van Cleef & Arpels’ “l’Ile au Trésor.”

The integration of Vhernier, which Richemont acquired last year, is on track, Richemont said.

“Against the backdrop of significant currency movements, higher raw material costs, and, to a lesser extent, the initial effect from additional U.S. duties, the jewelry maisons implemented measured price increases whilst managing their costs efficiently,” the company said. 

That strong top-line momentum allowed the jewelry division to mitigate the impact of external headwinds, the company said, adding it posted a €2.5 billion ($2.9 billion) operating result in the first half, up by 9 percent (21 percent at constant exchange rates).

While jewelry sales were strong, Richemont’s watch brands continued to struggle, albeit a little less.

Its watch portfolio includes A. Lange & Söhne, Baume & Mercier, IWC Schaffhausen, Jaeger-LeCoultre, Panerai, Piaget, Roger Dubuis, and Vacheron Constantin.

Sales in the division fell 6 percent year-over-year in the first half (2 percent at constant exchange rates) to €1.56 billion ($1.82 billion).

Q2 watch sales were down 2 percent year-over-year (up 3 percent at constant exchange rates) to €734 million ($855 million).

It’s been a challenging 18-month period for the global watch market, said Richemont, with U.S. duties, as well as the high price of gold and currency fluctuations, affecting Swiss-made products.

The tax on imports from Switzerland stands at 39 percent, as announced by President Donald Trump on July 31, though the two countries announced Friday that they had reached a deal that lowers tariffs to 15 percent.

How well watches are selling depends on the region, with sales in the Americas up double digits in Q1 and Q2 while sales in Asia Pacific declined due to soft demand in China.

Watches that performed well in the first half include Piaget’s jewelry watch “Sixtie,” IWC Schaffhausen’s “Ingenieur Automatic 40” with the green dial, Jaeger-LeCoultre’s “Reverso Duoface Small Seconds,” and A. Lange & Söhne’s “Odysseus Honeygold.”

Vacheron Constantin celebrated its 270th anniversary with a timepiece display at the Louvre titled “La Quete du Temps,” highlighting its history, craftsmanship, and engineering.

Overall, Richemont said it “delivered a solid performance against a persistently complex macroeconomic and geopolitical backdrop” in the first half, driven by double-digit growth across all regions.

Sales grew across all distribution channels in the first half, it said, with direct-to-client sales representing 76 percent of sales, in line with the prior-year period.

Retail sales were up 6 percent (10 percent at constant exchange rates) year-over-year in the first half and up 9 percent (14 percent at constant exchange rates) in Q2.

Online sales were up 3 percent (7 percent at constant exchange rates) year-over-year in the first half and up 3 percent (9 percent at constant exchange rates) in Q2.

Wholesale sales and royalty income increased 5 percent year-over-year (9 percent at constant exchange rates) in the first half and 9 percent (13 percent at constant exchange rates) in Q2.

The Americas, Europe, and the Middle East regions led the way in the first half with strong sales, while China, Hong Kong, Macau, and Japan returned to growth in Q2.

In the Americas, it was the jewelry brands and specialist watchmakers that drove the company’s overall sales growth, said Richemont.

First-half sales in the Americas were up 11 percent (18 percent at constant exchange rates) while Q2 sales grew 12 percent (20 percent at constant exchange rates).

Sales in the Americas now account for 25 percent of group sales, up from 23 percent last year.

Looking to the second half of the year, Richemont expects the uncertainty to continue, though Rupert noted he has “full confidence” in his team’s abilities.

“Looking ahead, it is evident that we will need to continue navigating through uncertain times, given that recovery paths remain unsteady, for instance in China, and that external pressures show no sign of abating,” said Rupert.

“Managing the uncertainty will continue to require agility and discipline, particularly as we face demanding comparatives.”