Richemont, the Swiss luxury goods group, reported its financial results for the first quarter ending June 30, 2024. Despite challenging economic and geopolitical conditions, the company showed resilience in its sales performance.
Sales Performance
Sales for Richemont increased by 1% at constant exchange rates but declined by 1% at actual exchange rates. The comparison is challenging due to high growth in the same period last year.
| Quarter Ended June 30, 2024 | 2023 | % Change 2024 vs 2023 |
|---|---|---|
| €m | Actual | Constant Rates |
| By Region | ||
| Europe | 1,171 | +5% |
| Asia Pacific | 1,809 | -18% |
| Americas | 1,215 | +10% |
| Japan | 603 | +59% |
| Middle East & Africa | 470 | +8% |
| By Distribution Channel | ||
| Retail | 3,631 | +2% |
| Online Retail | 315 | +6% |
| Wholesale & Royalty Income | 1,322 | -5% |
| By Business Area | ||
| Jewellery Maisons | 3,656 | +4% |
| Specialist Watchmakers | 911 | -13% |
| Other | 701 | +6% |
| Total | 5,268 | +1% |
Regional Sales Analysis
Europe saw a 4% increase in sales at actual exchange rates and 5% at constant exchange rates. The Americas and Japan were standout performers, with sales growth of 11% and 42%, respectively, at actual exchange rates.
However, Asia Pacific experienced a significant decline. Sales dropped by 19% at actual exchange rates due to persistent economic uncertainties in the region.
Channel Performance
Richemont’s retail channel remained stable, showing a slight increase of 2% at constant exchange rates. Online retail grew by 6%, reflecting the ongoing shift towards digital sales.
Wholesale and royalty income, however, saw a decline of 6% at actual exchange rates. This decrease was primarily due to lower sales in the Asia Pacific region.
Business Area Performance
Jewellery Maisons continued to perform well, with a 2% increase in sales at actual exchange rates. The ‘Other’ business area, including Fashion & Accessories Maisons, also grew by 6%.
Specialist Watchmakers faced challenges, with a 14% drop in sales at actual exchange rates. This segment has a strong presence in Asia Pacific, affecting overall performance.
Direct-to-Client Sales
Richemont reported further progression in direct-to-client sales, particularly in its Jewellery Maisons. This strategy has helped mitigate some of the impacts of regional downturns.
Impact of Economic Conditions
The luxury goods market faces significant headwinds from global economic uncertainties. Richemont’s diverse portfolio and strong brand presence have helped cushion these impacts.
Conclusion
Richemont has shown resilience amid challenging conditions. While Asia Pacific remains a concern, strong performances in other regions and channels offer a balanced outlook.