Richemont H1 beats on jewelry strength as watch drag eases and tariffs abate
Bottom Line Impact
Jewelry led growth, easing watch headwinds, and tariff de escalation position Richemont for sustained high single digit revenue growth, 50 to 100 bps margin expansion potential, share gains in hard luxury, and reinforced brand equity with VICs through 2025.
Key Facts
6- Group sales EUR 10.62b in H1, up 10 percent constant FX and 5 percent reported
- Jewelry maisons sales EUR 7.75b, up 14 percent constant FX and 9 percent reported
- Specialist watchmakers down 2 percent constant FX in H1 but returned to 3 percent growth in Q2
- Regional momentum at constant FX in H1 Q2 blend: Americas up 18 percent, Europe up 11 percent, China HK Macao up 7 percent in Q2
- Operating profit EUR 2.4b up 7 percent; period profit EUR 1.81b vs EUR 0.46b prior on nonrecurrence of EUR 1.2b noncash write down
- US tariffs cost EUR 50m in H1; risk previously up to EUR 300m FY if 39 percent rate persisted, now prelim cut to 15 percent for Swiss goods
Time Horizons
Key Roles Affected
Executive Summary
Richemont delivered 10 percent constant FX sales growth to EUR 10.62b in H1, with Q2 double digit gains across all regions driven by resilient local demand and disciplined pricing in jewelry. Preliminary US tariff relief and Q2 watch growth remove key overhangs, supporting a stronger revenue mix, margin resilience, and upgraded near term outlook.
Actionable Insights
Immediate Actions (Next 30-90 days)
Accelerate jewelry capacity and China retail expansion while maintaining watch distribution discipline
Rationale: Jewelry grew 14 percent constant FX and is the locomotive of growth; Q2 watch uptick warrants disciplined recovery not volume chasing
Role affected:CEO
Urgency level:immediate
Deploy VIC led capsule launches and high jewelry roadshows in the US and Europe to lift ASP by 5 to 7 percent and repeat rates by 200 bps
Rationale: Sustained local demand and share price reaction confirm appetite for elevated experiences and Cartier newness
Role affected:CMO
Urgency level:immediate
Short-term Actions (6-12 months)
Increase gold and FX hedge coverage to 70 to 80 percent for the next 12 months and reallocate 100 to 150 bps of opex to clienteling in Americas
Rationale: Pricing offset is working but input volatility remains; tariff relief frees funds to drive high ROI holiday conversion in strongest region
Role affected:CFO
Urgency level:short-term
Tighten wholesale to DTC mix by 300 to 500 bps and cap door count while prioritizing servicability and preowned certified programs
Rationale: Q2 growth is fragile; channel discipline and lifecycle services will protect margin and brand equity while demand normalizes
Role affected:Head of Watches
Urgency level:short-term
Risks & Opportunities
Primary Risks
- Gold price and FX volatility could compress gross margin if pricing lags
- China recovery remains uneven with traffic and tourism still below 2019 levels
- US tariff policy uncertainty until final agreement is ratified and implemented
Primary Opportunities
- Price recovery and mix shift toward high jewelry to expand gross margin by 100 to 150 bps
- Americas demand strength to drive double digit holiday comps via VIC activation
- Watches stabilization to low single digit growth with tighter distribution and higher sell through