Richemont, the Swiss luxury goods maker that owns the Cartier brand, reported earnings that beat analysts’ estimates as sales in China rebounded following the end of Covid Zero policies.

Operating profit was €5.03 billion ($5.5 billion) and sales rose 14 percent at constant currencies in the year through March, Richemont said Friday, beating analysts’ estimates. The stock rose as much as 5.9 percent to a record in Geneva.

The company’s chairman, billionaire Johann Rupert, said economic volatility and political uncertainty look set to continue. He said the company’s brands are well-positioned to meet strong demand, driven by the resumption of travel by customers from China. Rivals LVMH and Prada have recently reported better-than-expected first-quarter revenue due to stronger demand in China.

However Rupert said Chinese consumers have been cautious on spending following the end of the Covid rules, and that the company doesn’t expect demand there to rebound as strongly as US demand did after the end of pandemic measures. While individuals from China are traveling again, large group trips haven’t yet recovered amid high costs for flights, he said.

The US is at risk of a downturn as the country will go through a credit contraction, Rupert also said, speaking on a call with reporters.

“Brands with strong pricing power are likely to emerge as the winners in the coming months,” wrote Jean-Philippe Bertschy, an analyst at Vontobel. “Richemont is very well positioned with Cartier, Van Cleef & Arpels or Vacheron Constantin. The company has everything in place for further market share gains.”

Rupert shot down suggestions that bigger rival LVMH had its sights set on acquiring Richemont, which in addition to Cartier and Van Cleef & Arpels, owns a slew of high-end luxury watch brands. Rupert said he has had frequent discussions with LVMH Chairman Bernard Arnault, but that Richemont was not for sale.

“We’re in constant dialogue and we respect each other’s independence,” he said of LVMH.

Richemont also decided against a deal with Kering SA two years ago when investment bankers proposed one, Rupert said. “Why would we want to? We know what we have,” he said.

The company also announced plans to buy back as many as 10 million A shares, representing 1.7 percent of the company’s capital. The shares will be held in treasury to hedge awards to executives and employee’s under the company’s long-term incentive plan. Based on Thursday’s share price, a stake of that size would be worth 1.5 billion francs ($1.7 billion).

Fiona Druckenmiller, the founder of FD Gallery, a New York boutique that offers vintage and pre-owned jewelry, is set to join the board of directors. Her husband, Stan Druckenmiller, is the billionaire founder of Duquesne Family Office and managed money for billionaire George Soros for more than a decade. A third of the board members will be women at the next shareholder meeting.

By Andy Hoffman.

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