South African billionaire Johann Rupert’s Richemont lifts half-year profit 42% to $2.8 billion

South African billionaire Johann Rupert’s Richemont lifted half-year headline earnings 42% to about $2.8 billion, even as its shares slid on slower jewelry growth.

The Swiss luxury group, which owns Cartier and Van Cleef & Arpels, reported headline earnings of €2.5 billion ($2.8 billion) for the six months ended Sept. 30, up from €1.8 billion ($2.0 billion) a year earlier. Headline earnings per share rose 42% to €4.27 ($4.77) from €3.01 ($3.36). Dollar conversions use about $1.117 to the euro, the rate implied by the rand figures in the source report at R16.6 to the dollar.

Sales rose 16% to €12.3 billion ($13.7 billion) from €10.6 billion, while gross profit climbed 18% to €8.2 billion ($9.2 billion). Operating profit rose 33% to €3.1 billion ($3.5 billion) from €2.4 billion ($2.7 billion). Retail sales, which make up most of the business, reached €8.8 billion ($9.8 billion), up 20% on the prior-year period.

The Americas stood out. Sales there grew 23% and accounted for 26% of group sales. Richemont said profitability rose despite continued pressure from elevated raw material costs.

The market reaction was less kind. Billionaires.Africa reported that Richemont shares fell as much as 9% on Friday and were down 4.7% by 10:45 GMT after jewelry sales rose 14% at constant exchange rates in the second quarter, below the 16% analysts expected. Before that drop, Richemont’s market value stood at about R1.8 trillion ($108 billion), based on a share price of 354,132 cents at the close on Nov. 12.

Rupert, 76, controls the company as chairman through Compagnie Financière Rupert, which holds more than half the voting rights while owning about 10% of the equity, according to Billionaires.Africa. That structure means his family keeps control even as outside investors drive the share price.

Meanwhile, succession is in view. His son Anton Rupert, 39, became non-executive co-deputy chairman in September, sharing the role with Bram Schot, the same report said. Analysts were divided on the move, with one calling it “only a partial surprise” and another downgrading the stock.

The question for investors is whether earnings growth can keep pace with the high expectations built into the share price. A drop of this size after a 42% jump in profit shows how much of the good news had already been priced in.

As a result, Richemont’s results confirm that demand for its jewelry remains strong, while the share reaction shows investors are now judging the company on how fast that demand can keep growing.