Estee Lauder and Tapestry shares rise on strong Richemont results

Shares of Estee Lauder (NYSE: EL) and Tapestry (NYSE: TPR) saw notable gains in Monday trading, with Estee Lauder up 3.7% and Tapestry up 2%. The gains in the luxury goods companies came on the back of strong quarterly results from Swiss luxury group Richemont, which reported a 10% sales increase for the third quarter ending December 31, 2024.

Richemont’s outstanding performance was marked by record quarterly sales of €6.2 billion, showing strong demand in several key markets. The Americas, Europe, the Middle East and Africa all achieved double-digit growth, and Japan also achieved strong results. Despite a decline in sales in the Asia-Pacific region, mainly due to weak demand in China, the company’s overall sales in the nine-month period increased by 4% at constant exchange rates and 3% at actual exchange rates.

The luxury goods group’s sales growth was driven mainly by a 14% surge in its jewelry manufacturing division, which includes well-known brands such as Cartier and Van Cleef & Arpels. The accelerated growth was particularly driven by successful jewelry and watch collections, especially during the festive period. Sales in the professional watchmaking division fell 8%, easing from the larger decline in the first half of the year. Sales in the “other” category (including the fashion and accessories manufacturing division) rose 11%, with brands such as Alaïa and Peter Millar making significant contributions.

The retail channel led the way with sales growth of 11%, with growth also seen in online retail and wholesale. The company reported a strong cash position of €7.9 billion, highlighting its financial health and continued investment in its long-term growth prospects.

As a bellwether for the luxury goods industry, the positive news from Richemont suggests a favorable environment for related companies such as Estee Lauder and Tapestry. Investors in these stocks may be reacting to the broader implications of Richemont’s performance, anticipating similar trends in consumer spending and demand within the luxury goods sector.

Today’s share price movements for Estee Lauder and Tapestry reflect the ripple effects of broader market sentiment and financial results for the luxury goods industry. As the market continues to digest Richemont’s strong earnings, investors will be watching the performance of the related stocks closely for indicators of the sector’s health and direction.