Richemont (CFR.CH) posted solid results for the first half of the 2025/26 financial year (six months to 30 September 2025), demonstrating the resilience of its luxury brand portfolio despite macroeconomic challenges. Sales rose 10% at constant exchange rates (5% on a nominal basis) to €10.6 billion, significantly exceeding analysts’ expectations (consensus: +6.94%). The most spectacular growth came in the second quarter, when sales rose to +14% at constant exchange rates, confirming Richemont’s position as the fastest-growing company in the luxury sector.
Jewellery Segment – Growth Engine
The Jewellery Maisons segment, comprising the Cartier, Van Cleef & Arpels, Buccellati and Vhernier brands, remains the group’s growth engine. Sales in this segment increased by 14% at constant exchange rates (9% in nominal terms) in H1, with momentum particularly strong in Q2 at +17%. The operating margin remained at an impressive 32.8%, despite significant challenges in the form of rising gold prices. The success of this segment reflects a fundamental shift in luxury consumption – jewellery is seen as a better store of value in times of economic uncertainty than expensive clothing or leather goods.
Sales growth in America (+18% at constant exchange rates) and Europe (+11%) drove global results, while the Asia-Pacific region showed signs of business recovery – most notably China, Hong Kong and Macao, which returned to growth in Q2.
Pressure on the Watch Segment – Specialist Watchmakers
The Specialist Watchmakers segment (A. Lange & Söhne, Jaeger-LeCoultre, IWC, Panerai, Piaget, Vacheron Constantin and others) remains under pressure. Sales fell by 2% at constant exchange rates (6% in nominal terms), although Q2 showed a recovery with growth of +3% at constant exchange rates. The operating margin fell sharply to 3.2% from 9.7% a year earlier, the result of a combination of unfavourable exchange rate movements, rising gold prices and US tariffs. Demand in China, Hong Kong and Macao remains weak, although some improvement was seen in Q2.
Financial and Market Challenges
The gross profit margin decreased by 190 basis points to 65.3% from 67.2% a year earlier, reflecting the combined impact of unfavourable FX movements, higher commodity prices (particularly gold) and US import tariffs estimated at €300 million (~$349 million) for the full financial year. The company implemented cautious price increases to mitigate these pressures, while controlling operating costs.
Financial Position and Outlook
Net profit for the period was €1.8 billion, up 297% year-on-year (compared to €457 million in the previous year, which included one-off write-offs), and cash flow from operating activities increased by 48% to €1.854 billion. The consolidated cash position was €6.5 billion, providing financial flexibility for further investment in brand growth.
Despite solid performance, the outlook remains cautious. Chairman Johann Rupert emphasised that “the path to recovery remains uncertain, particularly in China, and external pressures show no signs of abating.” Chinese customers are becoming more selective – a trend that may continue even after the economy has fully recovered.
Summary
Richemont shares rose 7% on the news of the results, the biggest daily gain since April, confirming market optimism about the group’s resilience. However, ongoing challenges, particularly trade uncertainty, margin pressure and slow recovery in key Asian markets, call for caution in analysing the future.
FIRST HALF-YEAR RESULTS AT A GLANCE
- Sales at fixed exchange rates +10%, forecast +6.94%
- Revenue in Europe at constant exchange rates +11%, forecast +9.85%
- Revenue in the Asia-Pacific region at constant exchange rates +5%, forecast +1.28%
- Revenue in America at constant exchange rates +18%, forecast +14.2%
- Revenue in Japan at constant exchange rates -4%, forecast -6.21%
- Revenues in the Middle East and Africa at constant exchange rates +19%, forecast +14.4%
- Retail sales at constant exchange rates +10%, forecast +7.76%
- Wholesale sales and royalty income at constant exchange rates +9%, forecast +4.14%
- Operating profit of EUR 2.36 billion, forecast of EUR 2.16 billion
- Sales of EUR 10.62 billion, forecast of EUR 10.42 billion
- Jewellery sales €7.75 billion, forecast €7.57 billion
- Sales of specialist watch manufacturers EUR 1.56 billion, forecast EUR 1.53 billion
- Operating margin 22.2%, forecast 21%
- Operating margin of jewellery houses 32.8%, forecast 31.6%
- Operating margin of specialist watch manufacturers 3.2%, forecast 4.45%
- Gross margin 65.3%, forecast 66.3%
- Jewellery sales at a fixed exchange rate +14%, forecast +10.3%
- Sales of specialist watch manufacturers at a constant exchange rate of -2%, forecast -4.99%
The company’s shares started Friday’s trading with gains that pushed them to their highest levels since March this year. The company is currently maintaining a medium-term upward trend. Source: xStation
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