Richemont hails “solid” Q2, Alaïa and Peter Millar are strong, improved momentum at Chloé.

Luxury giant Richemont hasn’t been performing badly in recent periods with its last set of annual results this spring being generally good and its Q1 numbers in July showing it making progress.

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But there have been negatives too and those Q1 figures saw fashion brand sales dipping 1%. So what about the latest set of results, the Q2 numbers that it released on Friday?

Well, the group hailed its “solid” results for the first half as a whole and said it saw “strong sales momentum” in Q2 specifically (the three months to the end of September).

Group sales for the half at €10.6 billion rose 10% at constant exchange rates (CER) or 5% at actual rates, and importantly, in Q2 they accelerated (CER) to +14%.

And it saw growth in operating profit to €2.358 billion, up by 7% actual, or by 24% at constant exchange rates, resulting in a 22.2% operating margin. This was underpinned by a strong sales contribution and continued cost discipline, “mitigating the impact of macroeconomic headwinds on gross margin in the first half”. In fact, the gross margin dipped by 1%.

Profit for the period from continuing operations rose 1% to €1.796 billion while reported profit shot up to €1.813 billion from €457 million a year ago. That was driven by continuing operations and the non-recurrence of the prior-year-period loss from discontinued operations (remember, it sold YNAP to LuxExperience).

Of course, as always, there were winners and losers among its categories. It saw continued strength at Jewellery Maisons like Cartier and Van Cleef & Arpels throughout H1. Strong demand fuelled 9% actual growth in jewellery and 14% CER, delivering a 32.8% operating margin.

Yet Specialist Watchmakers still declined over the period, albeit more slowly. Sales were down 6% actual and 2% CER as the tough environment for luxury watches continued. But the situation is improving after a tricky 18 months and here, Q2 delivered a welcome uplift with a 3% CER rise.

But what about the ‘Other’ business line, that is the unit that includes its fashion and accessories brands? As mentioned, they were down 1% in Q1 and the company said they were “broadly stable” for the half as a whole. In reality that meant a continuing 1% dip for the six months at actual rates. But CER, sales there rose 2% in H1 and 6% in Q2, although the division made a €42 million operating loss, of which of which €33 million was for the Fashion & Accessories Maisons specifically.

Richemont said the Fashion & Accessories Maisons overall were supported by double-digit growth in ready-to-wear at constant rates. The improving sales performance was primarily driven by continued strength at Alaïa and Peter Millar, and improved momentum at Chloé. 

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Regionally, the group was pretty strong in the first half and all regions were up by double-digits in Q2 at constant rates, led by “sustained local demand”.

The strength was driven by H1 double-digit sales growth in Europe, the Americas, and the Middle East at both actual and constant exchange rates. In Q2 specifically, China, Hong Kong and Macau combined, together with Japan, returned to growth, while other regions maintained their solid sales momentum. 

Sales also grew across all distribution channels in the first half, with direct-to-client sales representing 76% of group sales, in line with the prior-year period.