This week, the European luxury sector experienced a significant boost, fueled by Richemont’s (SIX:CFR) exceptional financial performance. Known for its iconic Cartier brand and leadership in jewellery and luxury goods, Richemont exceeded expectations, driving its stock and the broader sector to impressive gains. The rally underscores the resilience and potential of the luxury market amidst a challenging global economy.
Richemont’s Impressive Performance
For the third quarter of the 2024/2025 fiscal year, Richemont reported revenues of €6.2 billion, significantly exceeding the consensus estimate of €5.58 billion. This exceptional performance propelled its stock to rise by 18.23% over the week, closing at CHF163.75. Regional performance showed robust growth in Europe (+19%), the Americas (+22%), and the Middle East (+20%), although China remained a weak spot, with a decline of 18%.
The jewellery division performed exceptionally well, with sales increasing 14% year-over-year to €4.5 billion. This highlights Richemont’s capacity to leverage global demand for luxury goods, despite economic uncertainties.
Broader Impact on the Luxury Sector
Richemont’s success rippled across the European luxury sector. LVMH (EPA:LVMH) gained 6.99% over the week, closing at €690.10, while Kering (EPA:PRTP) rose 8.37% to €242.70 (dividends included), and Hermes International (EPA:HRMS) climbed 5.20% to €2,490. The strong performance of luxury stocks also boosted broader indices. The CAC 40 gained 3.75% to 7,709.75 points, while the EuroStoxx 50 climbed 3.44% to 5,148.30 points, underscoring the importance of the luxury segment in European markets.
Luxury-Focused ETFs Reflect Market Momentum
Investors seeking exposure to the booming luxury sector may consider ETFs such as the Amundi S&P Global (NYSE:SPGI) Luxury ETF-C (EPA:GLUX) (GLUX). This fund tracks the performance of the S&P Global Luxury Index, composed of major European luxury stocks, including Richemont, LVMH, and Hermès, and has benefited from this week’s rally. The fund posted a weekly performance of 4.55%, mirroring the strong gains across the sector.
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