Richemont’s fashion brands grow, but at a slower pace than jewelry ones. The Swiss group closed a solid first quarter (April-June), but not a great one. Growth and revenue were below the analysts’ forecasts. Sales were down 4% in the USA, while China increased 32% and jewelry as a segment performed well too (+19%). “Good, not great”, as stated previously, for fashion brands. Their growth equaled +8% on comparable basis. Yet, the jewelry brands grew 24% over the same period.
Good, not great
Richemont’s first quarter (April-June 2023) confirmed the bounce-back of the Chinese market and the weakness of the US one. But it also highlighted how the luxury conglomerate continues to be focused on jewelry (much better performance than the 10% increment of the watches category). Activities for this division grew 24% at current rates, while fashion sales (defined as “F&A Maisons”) only increased 8%.
What is happening to Richemont’s fashion houses
One positive note for fashion sales comes from the USA, where retail sales remained stable. “Particularly relevant – says the statement -, is the double-digit growth of sales for Peter Millar. Moreover, Montblanc (in photo), is starting to benefit from evolving product lines and a newly-found vitality of the travel retail channel. Chloé is also performing well from a retail standpoint. Alaïa, Delvaux and Dunhill all recorded strong increments”.
Less than forecasted
Overall, Richemont group recorded a 14% increase in sales during the first quarter for a revenue of 5.32 billion euro. Barclays’ analysts had forecasted 5.43 billion euro, and Bank Vontobel 5.54 billion (says Reuters). Richemont increased organic sales 19% (without considering exchange rates’ fluctuations): analysts expected +20%.
Read also:
