Burberry beats sales expectations as scarves and trench coats lift demand
The Americas recorded 11% sales growth in the second quarter, while China posted a 5% increase despite broader weakness in luxury spending.
Richemont profit rises 39% as jewelry sales lead growth
The Cartier owner's shares fell 7% in early trading despite higher earnings and a recovery at its specialist watchmakers.
Swiss luxury group Richemont reported net profit of €2.5 billion for the six months ended September, up 39%, supported by jewelry demand and improving watch sales. The company said revenue reached €12.3 billion, an organic increase of 17%.
Profit exceeded expectations, but Richemont shares fell 7% during early trading on November 13. RBC analysts described the performance as reassuring against difficult conditions for luxury companies, while noting that second-quarter jewelry growth came in slightly below expectations.
Jewelry remained Richemont's largest source of growth. The division, which includes Cartier, Van Cleef & Arpels and Buccellati, generated €9.1 billion in sales, up 19% organically. Chair Johann Rupert said the overall trend for jewelry brands was very positive. Citi analyst Thomas Chauvet said strong margins were accompanied by early indications that jewelry growth was normalizing.
The specialist watchmaking division, home to Vacheron Constantin and Jaeger-LeCoultre, posted second-quarter organic sales growth of 12%, compared with the 4% analysts had expected.
Japan led regional performance in the quarter, recording 23% organic growth. The Americas followed with 19%, while Europe recorded 15%. Mainland Chinese demand was still subdued. Revenue from the Middle East and Africa declined 7% as conflict in the region weighed on tourist spending.
Richemont's gains came amid a prolonged luxury-sector slowdown marked by weaker Chinese demand, Middle East instability and reduced spending by aspirational shoppers. High-end jewelry demand has held up better than demand for luxury handbags and fashion.