Richemont, the Swiss luxury goods group, has reported its financial results for the first quarter of FY25, covering the period ended 30 June 2024. Published on 16 July 2024, these results highlight the Group's ability to navigate a challenging macroeconomic and geopolitical landscape while maintaining a stable financial position.

Financial Performance Overview

Richemont's sales for the first quarter of FY25 reached €5,3 billion at constant exchange rates, reflecting a modest 1% increase compared to the same period last year. However, at actual exchange rates, sales saw a slight decline of 1%, underlining the resilience of the Group in a market environment marked by significant uncertainties.

Region/Channel/Business Area	Sales FY25 Q1 (€m)	% Change (Constant Rates)	% Change (Actual Rates)
Europe	1.171	+5%	+4%
Asia Pacific	1.809	-18%	-19%
Americas	1.215	+10%	+11%
Japan	603	+59%	+42%
Middle East & Africa	470	+8%	+9%
Retail	3.631	+2%	0%
Online retail	315	+6%	+6%
Wholesale and royalty income	1.322	-5%	-6%
Jewellery Maisons	3.656	+4%	+2%
Specialist Watchmakers	911	-13%	-14%
Other	701	+6%	+6%

The performance across regions was mixed, with Japan emerging as a standout performer, recording an impressive 59% sales increase, driven by robust domestic demand and strong tourist spending, particularly from Chinese, South Korean, and American customers. The Americas also performed well, with sales up 10%, benefiting from sustained domestic demand across all distribution channels. Europe showed a 5% growth, supported by resilient local demand and stronger tourist purchases. In contrast, the Asia Pacific region saw a significant contraction of 18%, primarily due to a steep 27% decline in sales in China, Hong Kong, and Macau.

In terms of distribution channels, retail sales, which accounted for 69% of the Group's total sales, grew by 2%, driven by mid-single digit growth at the Jewellery Maisons. Online retail sales increased by 6%, supported by growth at Watchfinder and the Jewellery and Fashion & Accessories Maisons. However, wholesale and royalty income declined by 5%, largely due to weaker performance in Asia Pacific.

Business Area Performance

The Jewellery Maisons, comprising Buccellati, Cartier, and Van Cleef & Arpels, continued to be a significant contributor to Richemont's overall performance, posting a 4% sales growth at constant exchange rates. This growth was driven by both jewellery and watch sales, despite challenging comparisons from the prior year.

The Specialist Watchmakers segment experienced a 13% decline in sales, reflecting the difficulties in the Asia Pacific region, although Japan's performance partially mitigated these losses. Vacheron Constantin and A. Lange & Söhne were noted for their resilience during this period.

The Group's 'Other' business area, which includes its Fashion & Accessories Maisons such as Alaïa, Chloé, and Peter Millar, recorded a 6% increase in sales. This growth was bolstered by the ongoing momentum of Alaïa and Peter Millar, although some of the other Maisons, including Chloé, faced softer sales.

ESG Achievements and Future Goals

Richemont remains committed to advancing its sustainability and circular economy goals. The Group has been actively pursuing initiatives aimed at reducing its environmental impact and enhancing social responsibility across its operations. This includes efforts to source raw materials responsibly, reduce carbon emissions, and ensure ethical practices throughout its supply chain.

One of the notable achievements in this area is Richemont's continued focus on integrating sustainability into its product designs and manufacturing processes. The Group's Maisons have increasingly incorporated recycled materials and sustainable practices into their operations, aligning with the growing consumer demand for eco-friendly luxury goods.

Looking ahead, Richemont aims to further enhance its ESG performance by setting ambitious targets for reducing its carbon footprint, increasing the use of renewable energy, and promoting diversity and inclusion within the organisation. The Group is also committed to driving innovation in sustainable luxury, with a focus on developing new materials and processes that minimise environmental impact.

Future Outlook

Richemont's first-quarter results for FY25 underscore the Group's resilience in a challenging global environment. While the overall sales growth was modest, the strong performance in key regions like Japan and the Americas, as well as the continued success of the Jewellery Maisons, highlight the Group's robust business model.

As Richemont looks to the future, the Group remains focused on navigating the evolving luxury landscape by leveraging its strong brand portfolio, expanding its direct-to-client sales channels, and driving further growth in key markets. In addition, the Group's commitment to sustainability and responsible business practices will continue to be a central pillar of its strategy, positioning Richemont as a leader in the luxury industry's transition towards a more sustainable future.

Further analysis could explore the impact of exchange rate fluctuations on Richemont's financial performance, particularly given the decline in sales at actual exchange rates. Additionally, a deeper dive into the performance of individual Maisons and their respective strategies could provide valuable insights into the Group's overall resilience and future growth prospects.

Read the full Richemont Group report Here.

Cover Image Courtesy: Richemont Group Website