Richemont, the Swiss luxury conglomerate that owns the Cartier, Montblanc, Piaget, and Van Cleef & Arpels brands, among others, reported third-quarter sales that fell below analysts’ expectations.
Sales for the period totaled €10.2 billion. Analysts had projected €10.34 billion.
Richemont is the latest house of luxe to post results weaker than expected as the post-COVID economic recovery is weighed down by inflation and high interest rates.
LVMH reported sales growth of 9 percent in the third quarter, compared to 17 percent in the previous one. Estée Lauder’s third-quarter results also showed weakness, as we reported in “Estée Lauder Share Price Crashes After Company Slashes Earnings Projection” (7 Nov 2023).
Richemont’s share price sank 5.2 percent on 10 November, with LVMH down 3.8 percent and Kering losing 3.3 percent.
“There has been a moderation in demand, which was to be expected,” Richemont board chair Johann Rupert said in comments quoted by the Financial Times. “That’s exactly what central banks intend. They wanted less demand and it’s across all asset classes.”
The company’s sales fell slightly in Europe, but rose in the Americas and the Asia-Pacific region, including among Chinese tourists visiting other countries.
TRENDPOST: Like container shipping companies’ freight rates and profits, sales by luxury brands are bellwethers: if the rich are tightening their Gucci belts, the financial pinch has reached all the way to the top of the economy.
When the rich start buying rich again, that will be an early signal that the economy is beginning to mend.