Just how profitable is Cartier? Richemont’s 2026 earnings are out, and the jewelry division is in a league of its own

Key takeaways

Richemont has just released its fiscal 2026 results, revealing which business is the true revenue driver in the luxury world. Along with surprising profit figures, the report also disclosed that a century-old watch brand is set to be sold.

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Cartier and Van Cleef are the group’s main profit drivers

Richemont’s latest results are impressive: total revenue for the year reached €22.4 billion (about HK$ 189.5 billion / NT$ 783 billion), while net profit hit €3.48 billion (about HK$ 29.4 billion / NT$ 121.6 billion), up 27%. A closer look at the financial report, however, shows that the group is standing on

The jewelry division, led by brands including Cartier and Van Cleef & Arpels, is practically a guarantee of strong results. It generated an astonishing €16.5 billion in sales (about HK$ 139.5 billion / NT$ 576.8 billion), with an operating margin as high as 30.5%. What does that mean? Its margin is on par with those of tech giants like Apple, providing the foundation for the group’s profits.

The harsh truth behind watch margins plunging to just 3.4%

Behind the jewelry division’s strong performance, the specialist watchmakers division is in a worrying position. Home to prestigious names such as IWC, Jaeger-LeCoultre, and Vacheron Constantin, it generated €3.15 billion in revenue (about HK$ 266 billion / NT$ 1,101 billion), yet its operating margin plunged from 5.3% last year to just 3.4%.

In other words, for these luxury watches that can cost hundreds of thousands, the group earns just €3.40 in profit (about HK$ 28 / NT$ 118) after costs for every €100 sold. The reasons are straightforward: the strengthening Swiss franc has eaten into profits, record-high gold prices have increased production costs, and Swiss watchmakers’ substantial fixed expenses have made the business increasingly difficult.

Baume & Mercier is set to be sold this summer

Faced with this high-pressure environment, Richemont has made a rare decision. Its financial report formally confirmed that the group has signed an agreement to sell its watch brand Baume & Mercier to Italy’s Damiani Group, with the deal expected to close in summer 2026.

The move isn’t difficult to understand. Baume & Mercier has long targeted the entry-level market, with prices around CHF 3,000 (about HK$ 25,500 / NT$ 105,000). Squeezed by gold prices and exchange rates, entry-level watches simply don’t have enough pricing power to absorb these soaring costs. Compared with Richemont’s current focus on high-end, directly operated boutiques, handing it over to the Damiani Group, which specializes in multibrand retail, may be a better arrangement.

This trend is worth watching because it suggests the luxury market is being reshuffled. Directly operated stores now account for as much as 71% of Richemont’s sales, indicating that brands increasingly want to keep profits in-house. In the future, this may limit the popular models available at independent watch stores.

Although the watch division’s profits are slim, the group has net cash of as much as €8.5 billion (about HK$ 71.9 billion / NT$ 297.1 billion). Together with the highly profitable jewelry division, it clearly has enough resources to help high-end watches through this painful adjustment period.

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