Written by John Reville and Mimosa Spencer
ZURICH (Reuters) – Cartier jewelery owner Richemont (SIX:) on Friday reported a drop in quarterly sales, as the luxury group largely offset tough conditions in China with growth elsewhere.
The owner of Swiss watchmakers including IWC, Jaeger-LeCoultre and Piaget said sales fell 1% at constant exchange rates to 4.81 billion euros ($5.19 billion), analysts cited by HSBC said. This was slightly above the consensus estimate of 4.78 billion euros.
Significant sales increases in the Americas, Japan and the Middle East offset an 18% decline in Asia Pacific in the three months to the end of September.
Chairman Johann Rupert said Richemont was showing “sustained resilience in a world where uncertainty is the norm” and pointed to the continued strength of its jewelery business.
“While we remain cautious in this uncertain environment, we remain confident in our ability to survive not only the current but future cycles,” Rupert said in a statement, adding that Richemont would continue to invest in production and marketing. .
Like other luxury companies, Richemont is battling weak demand in China due to an economic slowdown in the world’s second-largest economy.
Luxury rivals reported a mixed picture, with LVMH missing third-quarter sales forecasts as consumer confidence in China fell to its lowest level in the pandemic era.
Analysts have been trimming their forecasts for the luxury goods sector over the past few months to adjust for the weakness in China, with HSBC last week raising its forecast for Richemont’s organic sales growth next year to 0.3% from 2.9%. It was lowered to
Richemont, which makes necklaces, earrings and bracelets under the Cartier, Van Cleef & Arpels and Buccellati brands, reported on Friday that sales at its jewelry business rose 4%, while sales for watches fell 19%.
Bernstein analyst Luca Sorca said that while watch performance was far below expectations, “jewelry houses, which account for the majority of the group’s profits, had a solid performance.”
Richemont’s net profit for the first half of its fiscal year was due to its accessories business to online fashion retailer Yoox (BIT:) Net-A-Porter and German luxury platform Mytheresa.
(1 dollar = 0.9275 euro)
