Pomegra
Richemont shares opened about 4% lower after Q2 jewelry sales rose 14%, short of the 16% expected, as a Middle East slowdown weighed on the luxury sector.
- Richemont's Q2 jewelry sales rose 14% to €4.41 billion, against consensus of about 16%.
- Shares fell as much as 9% intraday on Nov. 13, after opening more than 4% lower.
- Group Q2 sales of €5.95 billion beat the €5.89 billion consensus; half-year net profit rose 39%.
Lead
Richemont (SIX: CFR), the Geneva-based owner of Cartier and Van Cleef & Arpels, opened about 4% lower in Zurich on Friday, Nov. 13, 2026. Growth at its jewelry houses slowed to 14% at constant exchange rates in the quarter ended Sept. 30, below the roughly 16% the market had priced in. The drop pulled on the wider luxury sector, where jewelry has been the main source of growth for the past two years.The decline came despite a strong set of headline numbers. The shares extended losses to as much as 9% in early trading, then recovered to trade about 4.7% lower by mid-morning in London.
What Happened to Richemont's Jewelry Sales?
Jewelry sales rose 14% to €4.41 billion in the second quarter, a sharp slowdown from the 24% increase in the first quarter. Jewelry is the group's core business and covers Cartier, Van Cleef & Arpels, Buccellati and Vhernier.
The shortfall came mainly from the Middle East, and especially the United Arab Emirates. Regional sales fell 7% in the quarter after rising 22% a year earlier, as geopolitical tensions escalated over the summer. Sales in the United States, Japan and Europe each rose 15% or more. Hong Kong and Macao improved. Mainland China was described as soft but stable.
Management said growth was driven by rising volumes and not only by price increases. That matters to investors who worry that luxury demand depends on repeated price rises.
Why Did the Shares Fall Despite a Strong Quarter?
Shares fell because the market had priced in an acceleration that did not arrive. Group sales reached €5.95 billion in the quarter, up 13% and ahead of the €5.89 billion consensus. Valuations in the luxury sector already reflected sustained double-digit jewelry growth, so a two-point miss in the biggest division was enough to trigger the sell-off.
The first-half figures were strong:
- Group sales for the six months to Sept. 30 were about €12.3 billion, up 16% at actual exchange rates and 17% at constant rates.
- Jewelry sales rose 18% to €9.1 billion, or 19% at constant rates, and the division's operating result rose to €3.2 billion from €2.5 billion.
- Operating profit rose 33% to €3.1 billion, with the margin up 3.3 percentage points to 25.5%.
- Net profit rose 39% to about €2.5 billion.
How Did the Other Divisions Perform?
Specialist watchmakers, which include Vacheron Constantin, IWC and Jaeger-LeCoultre, reported Q2 sales of €833 million, up 12%. For the half-year, watch sales were €1.7 billion, up 9%, with double-digit growth in every major region except Asia-Pacific, where China held back results.
The other businesses, including Chloé, Alaïa, Montblanc, Delvaux and Gianvito Rossi, generated €1.4 billion in the half, up 9%.
What Does This Mean for the Luxury Sector?
Richemont's reaction shows how much of the luxury sector's recovery now rests on jewelry. Fashion and leather goods groups have struggled with weaker aspirational demand, and watch makers remain exposed to China. Jewelry and high-end watches have been the stronger segments, helped by price-insensitive buyers and demand for objects that hold value.
A slowdown at the segment's market leader raises the question of whether comparisons are getting harder. The first-quarter comparison was easier than the second, and growth of 14% is still well above most peers. The Middle East decline is tied to regional tensions, not to a shift in global demand. Its effect on sentiment was larger than its effect on sales.
Sector stocks came under pressure in sympathy, as investors reassessed the growth rates built into valuations across European luxury.
What Comes Next for Richemont?
The next test is the holiday quarter, the most important period of the year for jewelry. Three variables will drive the results: whether the Middle East recovers as tensions ease, whether mainland China stays stable, and whether sales in the United States and Europe keep growing at 15% or more.
Margins give the group room to absorb a slower top line. At 25.5%, the operating margin leaves more room than a year ago, and the strong first half provides a buffer if growth moderates further.
Outlook
Richemont's results combined a miss in the segment that matters most with record-level profit growth. The 14% jewelry increase is a slowdown from 24%, and the market responded to that change in trend. The earnings base is stronger than a year ago. Holiday-season sales and Middle East demand will determine whether the pullback in Richemont shares is a one-day repricing or the start of a broader reset in luxury valuations.
Mentioned tickers: CFR
