Strong growth offset by China for Richemont in Q1

Published:  19 July, 2022
Credit: Dunhill

Swiss luxury group Richemont has posted its first quarter results, with growth weakened by Covid-affected China results.

The company achieved 20% sales growth at actual exchange rates and 12% at constant exchange rates. Sales performance was driven by Europe, Americas, Japan and the Middle East and Africa, which managed to offset lower sales in the Asia Pacific region. Growth was also led by retail, Richemont reported, which now accounts for 58% of the group’s sales, up from 55% in the prior year period.

At constant exchange rates, sales grew in Europe by 42% thanks to a return to tourist spending and robust domestic demand. Meanwhile, Covid restrictions in China brought double-digit declines in mainland China and Macau SAR (China) and a single digit decrease in Hong Kong SAR (China).

Richemont noted that sales in mainland China were 37% lower for the quarter, but the rate of decline reduced to 12% in June after restrictions began to ease. Momentum in Australia, Singapore, South Korea and Thailand managed to mitigate the losses, ultimately a sales reduction of 15% in the Asia Pacific region.

Japan posted the strongest regional performance with a sales increase of 83%. Meanwhile, in the Americas, sales increased by 25%, and resulted in the U.S. becoming Richemont’s single largest market with 22% of the group’s sales for the period. Sales in the Middle East and Africa increased by 6% on demanding comparatives, reflecting solid domestic and tourist spending, notably in Dubai and Qatar.