Growth accelerated markedly in the second quarter, with sales increasing 14 percent at constant rates and 8 percent at real rates, reflecting widespread momentum across all regions and business areas.
Richemont generated sales of €10.6 billion (~$12.3 billion) in the first half, up 10 percent year-on-year at constant rates, and the second quarter accelerated to 14 percent. Operating profit increased to €2.4 billion (~$2.78 billion) and net profit reached €1.8 billion. All regions posted double-digit gains in the second quarter. Strong cash flow and solid liquidity supported continued investment despite ongoing macroeconomic pressures.
The group posted an operating profit of 2.4 billion euros, an increase of 7 percent at real exchange rates and 24 percent at constant rates, resulting in an operating margin of 22.2 percent. Profit for the period increased to €1.8 billion, supported by continued operations and the absence of last year's €1.2 billion non-cash write-down from discontinued operations. Richemont's net cash position remained strong at €6.5 billion, bolstered by €1.9 billion in cash flow from operating activities.
After a difficult 18 months in the global watch market, the Specialized Watchmakers division recorded a slower sales decline of 6 percent (-2 percent at constant rates) to €1.6 billion. The second quarter produced an encouraging improvement, with sales rising 3 percent at constant rates, even as volatile demand in China and additional U.S. tariffs weighed on performance. Operating margin stood at 3.2 percent, Richemont said in a news release.
Sales in the “Other” business area remained broadly stable, declining 1 percent at real rates but increasing 2 percent at constant rates, with the second quarter contributing to a 6 percent increase at constant rates. Fashion and accessories houses including Alaia, Peter Millar and Chloe performed more strongly, although the segment posted an operating loss of €42 million.
All regions posted double-digit growth in the second quarter at constant exchange rates. Europe, the Americas and the Middle East and Africa delivered strong results in the first half, while China, Hong Kong, Macau and Japan returned to growth in the second quarter. Asia Pacific overall remained stable over the half, with South Korea and Australia continuing double-digit momentum.
Direct-to-customer sales accounted for 76 percent of total revenue, in line with last year, while retail sales grew 6 percent. Wholesale sales rose 5 percent at real exchange rates, supported by double-digit gains in Europe, the Americas and the Middle East and Africa.
Operating cash flow increased 48 percent to €1.85 billion, supported by profit growth, lower working capital needs and gains from hedging activities. Inventory levels rose to €9.6 billion, reflecting 18.1 months of inventory turnover, but remained manageable. The dividend payment of CHF 3.00 per share represented the largest outflow of the period and contributed to a reduction in net cash from March 2025, although the group remains well capitalized.
Richemont expects the operating environment to remain challenging, with continued geopolitical and economic pressures, elevated material costs and continued exchange rate volatility. Despite this, the group remains committed to investing in long-term growth, expanding manufacturing capabilities and strengthening its distribution network.
Richemont closed the period with momentum in key regions and business areas, reaffirming its confidence in the group's strategic direction and long-term value creation, the statement added.
Fiber2Fashion News Desk (SG)
