Cartier Owner Richemont Beats Sales Forecasts As China Recovery Continues

Richemont - the owner of Cartier, announced on Thursday that revenues exceeded market forecasts, driven by robust global demand for jewellery and a sustained recovery in greater China, its second-largest market and a barometer for the luxury sector.

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The Swiss company's stock increased by 3% following the report, as investors sought indications that the luxury goods sector could achieve sustained development in a year characterised by geopolitical instability and the insolvency of one of the industry's top retail entities, Saks Global.

The world's second-largest luxury corporation, which owns Van Cleef & Arpels and Buccellati, announced that revenues for its third quarter from September to December increased to 6.4 billion euros ($7.45 billion), reflecting a 4% year-on-year rise in reported currencies.

This surpasses the analyst average of 6.28 billion euros reported by Visible Alpha and signifies an 11% rise when evaluated in constant currencies.

Richemont's trading update offers initial insights on the market for premium items as we approach 2026. LVMH is scheduled to announce its annual results later this month, followed by Hermes and Kering, the owner of Gucci, in February. The Italian cashmere brand Brunello Cucinelli was the inaugural premium company to disclose quarterly sales this week.

Shares of industry counterparts, notably watch manufacturer Swatch and Birkin-bag producer Hermes, increased in early trading subsequent to Richemont's results announcement.

CHINESE MARKET MAINTAINS GROWTH RECOVERY

Richemont reported a sustained enhancement in China, Hong Kong, and Macau, with revenues increasing by 2%. According to a Bank Vontobel assessment, China constitutes slightly less than 20% of the company's sales, positioning it second after the United States.

Richemont's result in Greater China, primarily driven by robust activity in Hong Kong, marks the second consecutive quarter of enhanced sales in the region, following a 7% increase in the preceding three months.

In recent years, China has served as the primary development engine for luxury goods; nevertheless, it has faced challenges due to a persistent real estate crisis and a change in customer preferences, which have adversely affected demand for Western brands.

According to RBC analyst Piral Dadhania, Richemont's reported trends from China "may be considered a pivotal moment," indicating that its performance serves as a favourable signal for the broader luxury sector.

Demand in China, where the majority of European homes experienced significant sales declines last year, is regarded as a pivotal element for the luxury sector's return to consistent growth. "The Chinese consumer is essential to luxury and represents the crucial sector theme for 2026," stated Berenberg analyst Nick Anderson in a recent communication to clients.

Jewellery sales are increasing, however gold prices and the strong franc are exerting pressure on profit margins

After two years of stagnation, economists are becoming increasingly bullish about the $400 billion luxury sector, identifying jewellery as a vital growth catalyst, as inflation-conscious consumers perceive it as an investment rather than a mere indulgence.

Richemont's jewellery sales increased by 14%, bolstered by the introduction of novelty goods like bracelets and pendants, which were relatively affordable and gained popularity over the gifting season. Bernstein analysts remarked, "Jewellery is robust, and Richemont leads the market with its brands."

The watchmaking division of the company, encompassing the IWC and Jaeger-LeCoultre brands, increased sales by 7%.

Analysts from Deutsche Bank indicated that pressures on Richemont's margins, stemming from unprecedented gold prices and a robust Swiss franc, are likely to endure and may adversely affect the group's profit projections for the forthcoming fiscal year unless mitigated by additional price hikes.

A corporate representative refrained from commenting on the bankruptcy of Saks Global, the proprietor of U.S. department stores Saks Fifth Avenue, Bergdorf Goodman, and Neiman Marcus.

Richemont ranks as one of the principal unsecured creditors of the retailer. Saks has around $3.4 billion in liabilities to creditors, with claims from the top 30 unsecured creditors amounting to a total of $712 million, according to bankruptcy documents.