Richemont's Sales Growth Slows Amid Rising Economic Pressures and Decreased Luxury Spending

Richemont reports weaker than expected earnings, recording a 6% sales growth in the first half which falls below analyst predictions, with jewelry sales outperforming a disappointing watch sales performance.

• Richemont's sales growth slowed down due to economic pressures, rising inflation rates, and geopolitical tensions, recording a 6% sales growth in the first half to €10.2 billion ($10.9 billion), which is less than the analyst estimate of €10.34 billion. The profit for the same period also fell below expectations, indicating a decrease in luxury spending.
• Despite the general downturn, the company's jewelry sales rose by 9% in constant currency terms, outperforming the watches division which decreased by 4% during the first six months of the year.
• Europe saw a fall in sales by 1% while Asia-Pacific, boosted by growth in China, Hong Kong, and Macau, saw an increase of 8% in sales for the same period.
• Experts attribute the slump in the luxury market to multiple economic pressures, including high inflation and interest rates, which have affected consumer sentiment and spending.
• Luxury industry conglomerates, including Richemont's competitor LVMH, have also experienced slowdowns in sales growth. LVMH reported a pace drop to 9% in the third quarter, compared to their 17% in the previous quarter.

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