Financial review

Any long form references to Hong Kong, Macau and Taiwan within this Company Announcement are Hong Kong SAR, China; Macau SAR, China; and Taiwan, China, respectively.

Unless otherwise stated, all comments below relate to the results of the continuing operations. 

Sales

For the six months ended 30 September 2025, sales were 5% above the prior-year period at actual exchange rates. Excluding the effects of foreign exchange rate movements, sales grew by 10% with a notable acceleration in Q2 to +14% after +6% in Q1. 

The Americas, Europe and the Middle East & Africa regions all posted double-digit growth at both actual and constant exchange rates, sustaining a strong performance throughout the first half. 

In the Americas, continued supportive domestic demand drove sales 11% higher versus the prior-year period at actual exchange rates. Unfavourable foreign exchange movements weighed materially on sales in the region; at constant exchange rates, sales grew by 18%, fuelled by double-digit growth at the Jewellery Maisons and the Specialist Watchmakers. Sales in Europe were 10% higher than the prior-year period (+11% at constant exchange rates), largely led by solid local demand and growth across all main markets. Sales in the Middle East & Africa recorded the highest growth rate, up by 13% (+19% at constant rates). 

Sales in Asia Pacific were stable compared to the prior-year period (+5% at constant exchange rates), with notable improvement in Q2 in several markets. This was the case in China, Hong Kong and Macau combined, that returned to growth in Q2 led by the Jewellery Maisons. Of note, the South Korean and Australian markets continued to grow by double-digits in the first half. Sales in Japan were 5% lower than in the prior-year period (-4% at constant exchange rates), against challenging comparatives, as growth in the second quarter of the year, largely led by the Jewellery Maisons, partially offset lower sales in the first three months of the year. 

Retail sales, which accounted for 70% of total Group sales, were higher than the prior-year period by 6% (up by 10% at constant exchange rates), growing in every region except for Japan. Online retail sales made up 6% of total sales and were 3% higher than the prior-year period (up by 7% at constant exchange rates). Direct-to-client sales represented more than three quarters of Group sales (76%). Sales in the wholesale channel increased by 5% (up by 9% at constant exchange rates) with double-digit growth in Europe, the Americas and Middle East & Africa. 

Sales at the Jewellery Maisons were up by 9%, or by 14% at constant exchange rates. Growth was recorded across all regions except for Japan. Specialist Watchmakers’ sales declined by 6% (-2% at constant exchange rates), as growth in Europe and the Americas was more than offset by lower sales in Japan and Asia Pacific. Sales at the ‘Other’ business area fell by 1% (+2% at constant exchange rates) but saw solid growth in Europe and encouraging signs in the Americas. 

Further details on sales by region, distribution channel and business area are given in the review of operations. 

Gross profit

Gross profit for the period amounted to € 6 939 million, up by 2%. This represented 65.3% of sales, down from 67.2% in the prior-year period. The impact of adverse foreign exchange rates, combined with increased raw material prices, particularly gold, and to a lesser extent, additional tariffs in the US, were not fully offset by price increases and positive mix effects. 

Of note, while the impact from the additional US tariffs was limited in the first half given our proactive inventory management and the phasing of the different tariff rates, the effect for the current fiscal year is estimated at circa € 0.3 billion. This takes into consideration the evolution of our inventory position, planned shipments and assumes that current tariff rates remain in place. 

Operating profit

Operating profit for the six months ended 30 September 2025 increased by 7% compared to the prior-year period to € 2 358 million, or 22.2% of sales. Excluding the effects of foreign exchange rates, operating profit grew by 24%.

Overall, net operating expenses were maintained at broadly the same level as the prior-year period, resulting from an effective cost discipline across the Group. As a percentage of sales, they were down 220 basis points to 43.1%, reflecting positive sales leverage. Selling and Distribution expenses increased by 3%, reflecting salary increases and continued retail expansion, thus growing at a slower pace than sales and representing 25.7% of sales in the current period, below the 26.4% in the prior-year period. Communication expenses reduced by 4%, representing 8.2% of sales, lower than the 9.0% in the same period a year ago. This reflected the Maisons’ efficiency at allocating their costs, and to a lesser degree, phasing of some events, in a context of strong sales growth. Administrative and other expenses decreased by 2%, partly reflecting lower valuation adjustments and non-recurring costs than in the prior-year period.

Profit for the period

Profit for the period from continuing operations, at € 1 796 million, was 4% higher than the prior-year period. 

The € 67 million increase benefitted from € 15 million lower net finance costs, at € 158 million (compared to € 173 million in the prior-year period). Net foreign exchange losses on monetary items, which increased to € 584 million, were partly offset by gains arising from the Group’s foreign exchange hedging programme, amounting to € 461 million. Fair value gains on the Group’s investments in money market funds and segregated mandates were lower than the prior-year period. 

As a result, profit for the period stood at € 1 813 million, higher than the € 457 million in the prior year period, reflecting the non-recurrence of the € 1.2 billion non-cash write down from discontinued operations.

Earnings per share (1 ‘A’ share/10 ‘B’ shares) amounted to € 3.078 on a diluted basis. Excluding YNAP, diluted earnings per share (1 ‘A’ share/10 ‘B’ shares) from continuing operations were € 3.049. 

To comply with the South African practice of providing headline earnings per share (‘HEPS’) data, the relevant figure for headline earnings for the period ended 30 September 2025 was € 1 768 million (2024: € 1 677 million). Basic HEPS for the period were € 3.009 (2024: € 2.862); diluted HEPS for the period were € 3.001 (2024: € 2.851). Further details regarding earnings per share and HEPS, including an itemised reconciliation, may be found in note 10.3 of the Group’s condensed consolidated interim financial statements.

Cash flow

Cash flow generated from operating activities increased to € 1 854 million compared to € 1 249 million in the prior-year period. The increase of 48% reflected a rise in the operating profit and lower working capital requirements, coupled with higher cash inflows from foreign exchange derivatives.    

Net investments in property, plant and equipment of € 350 million represented an increase of 5% compared to the prior-year period. 

The cash outflow from the disposal of subsidiary undertakings of € 624 million represented the net cash balances held by the YNAP entities on the date of disposal.  

The 2025 ordinary dividend of CHF 3.00 per share (1 ‘A’ share/10 ‘B’ shares) was paid to shareholders, net of withholding tax, in September. The overall dividend cash outflow in the period amounted to € 1 888 million.

The Group acquired 1.12 million ‘A’ shares during the six-month period to hedge executive share grants. The cost of these purchases was partially offset by proceeds from the exercise of share options by executives, leading to a net outflow of € 177 million. 

Balance sheet

Inventories of € 9 613 million were € 600 million higher than at 31 March 2025, leading to an 18.1 months inventory rotation (September 2024: 19.9 months).

The Group’s gross cash position at 30 September 2025 reached € 12 507 million while the Group’s net cash position stood at € 6 519 million. The decrease of € 1 738 million compared to the position at 31 March 2025 is more than explained by the dividend payment. The Group’s net cash position is comprised of cash and cash equivalents, investments in externally managed bond funds and money market funds, as well as external borrowings, principally the € 5.9 billion euro-denominated corporate bonds. 

Shareholders’ equity represented 54% of total assets in line with 31 March 2025.

Sale of a controlling interest in YNAP

In April 2025, the Group completed the sale of YNAP to LuxExperience B.V., in exchange for shares in that company representing 33% of the fully diluted share capital at closing.Â