Richemont Defies Luxury Slowdown with Strong H1 Results, Navigates US Tariff Headwinds

ZURICH, Switzerland – Compagnie Financière Richemont SA, owner of iconic brands like Cartier and Van Cleef & Arpels, demonstrated remarkable resilience in the face of a challenging global economic landscape, reporting robust first-half (H1) fiscal year 2026 results. The luxury goods giant defied broader industry headwinds, posting double-digit sales growth and strong operating profit, fueled by robust jewelry demand and a resilient performance in the Americas.

Key Highlights from H1 FY26:

• Sales Growth: Group sales reached €10.6 billion, a 10% increase at constant exchange rates (5% reported).
• Operating Profit: Operating profit rose to €2.4 billion, a 24% increase at constant rates (7% reported).
• Jewelry Powerhouse: Jewelry Maisons drove growth, with sales up 14% at constant rates.
• Americas Momentum: Strong performance in the Americas, up 11% reported.
• Tariff Resilience: Navigating US tariffs through strategic pricing and cost control.

Defying the Downturn: A Sector Outperformance

Richemont’s results stand in stark contrast to some of its competitors. While LVMH reported a slight decline in revenue and Kering experienced significant challenges, Richemont successfully navigated the complexities of the current market. Analysts attribute this success to a few key factors: a strong focus on ultra-luxury goods, a diversified geographical footprint, and effective brand management.

“Richemont’s focus on high-end jewelry and watches has provided a degree of insulation from the broader economic slowdown,” explained one industry observer. “Consumers may be cutting back on discretionary spending in other areas, but demand for these prestige items remains surprisingly robust.”

Jewelry Leads the Way, Watches Show Signs of Stabilization

The Jewelry Maisons continue to be the primary engine of growth for Richemont. Demand for iconic pieces from Cartier, Van Cleef & Arpels, and other brands remains strong, particularly in key markets like the US and China. While the Specialist Watchmakers segment faced challenges, particularly in the first half of the year, there are signs of stabilization. Q2 saw a return to growth at constant exchange rates, suggesting that the segment is beginning to recover.

“The watch market is cyclical,” noted another industry source. “We’re seeing a gradual recovery in demand, particularly for high-end timepieces. Richemont is well-positioned to benefit from this trend, thanks to its strong brand portfolio and its commitment to innovation.”

Navigating the US Tariff Minefield

One of the biggest challenges facing Richemont is the imposition of a 39% tariff on Swiss watches imported into the United States. This tariff, a result of ongoing trade tensions, has significantly increased the cost of Swiss watches in the US market. However, Richemont appears to be mitigating the impact through a combination of strategic pricing, cost control, and inventory management.

“The US tariff is a serious headwind,” admitted a source within Richemont. “But we’re taking steps to minimize its impact on our sales and profitability. We’re focusing on value creation, optimizing our supply chain, and working with our retail partners to maintain competitive pricing.”

The company estimates the tariff could cost it approximately €0.3 billion for the full fiscal year, but it believes it can offset some of this impact through cost savings and price adjustments. Ongoing negotiations between the Swiss and US governments offer a glimmer of hope for a potential reduction in the tariff rate.

Geographical Performance: Americas Shines, Asia Recovers

Richemont’s geographical performance reflects a diverse and resilient business model. The Americas region continues to be a strong performer, with double-digit sales growth driven by robust domestic demand. Europe also delivered solid results, while the Middle East and Africa saw continued growth. Asia Pacific demonstrated signs of recovery in Q2, with China, Hong Kong, and Macau returning to growth after a period of softness. However, Japan experienced a decline in sales.

“We’re seeing a shift in demand towards emerging markets,” commented a retail analyst. “Richemont is well-positioned to capitalize on this trend, thanks to its strong brand presence in key Asian markets.”

Sustainability and Long-Term Value Creation

Beyond financial performance, Richemont is increasingly focused on sustainability and responsible business practices. The company has set ambitious targets for reducing its environmental impact and promoting ethical sourcing throughout its supply chain.

“Sustainability is no longer just a buzzword; it’s a core business imperative,” stated a company spokesperson. “We’re committed to creating long-term value for all our stakeholders, including our customers, our employees, and the environment.”

Outlook: Cautiously Optimistic

Looking ahead, Richemont remains cautiously optimistic about its prospects. The company expects continued growth in demand for its luxury goods, particularly in emerging markets. However, it acknowledges that the global economic environment remains uncertain and that there are a number of challenges ahead, including the US tariff, geopolitical tensions, and inflationary pressures.

Despite these challenges, Richemont appears well-positioned to navigate the complexities of the current market and to deliver sustainable growth in the years ahead. Its strong brand portfolio, diversified geographical footprint, and commitment to innovation and sustainability provide a solid foundation for future success.

“We’re confident that we can continue to create value for our stakeholders, even in a challenging environment,” concluded a senior executive at Richemont. “We’re committed to delivering long-term, sustainable growth and to building a legacy of excellence in the luxury goods industry.”