Richemont posted a slight rise in gross sales within the first quarter as strong outcomes from its jewellery manufacturers offset declines from China and its luxurious watchmakers.
The Cartier proprietor reported a gross sales achieve of 1% at fixed currencies to €5.3 billion ($5.8 billion). That was in keeping with analyst forecasts and compares with double-digit positive factors a 12 months earlier. The corporate mentioned jewellery gross sales — which account for the majority of its income and revenue and likewise embody the Van Cleef & Arpels and Buccellati manufacturers — confirmed resilience, rising 4%.
Richemont shares edged down 0.5% in Zurich after preliminary positive factors. They’re down 1.3% over the previous 12 months.
The Swiss firm, which additionally owns watch manufacturers Vacheron Constantin, Jaeger-LeCoultre and Piaget, is going through slowing demand for its dear merchandise, significantly in China, the place customers have turned cautious because the financial system falters.
Gross sales in Better China plunged 27% in the course of the quarter, the corporate mentioned, whereas its watchmaking division posted an general drop of 13%. Gross sales in all areas past Asia Pacific have been increased.
Richemont’s report follows worse-than-expected monetary outcomes from Swiss watchmaking rival Swatch Group AG, which posted a 70% drop in revenue it blamed on collapsing demand from China, and a revenue warning from luxurious large Burberry Group Plc.
The quarter noticed a “reassuring, robust sales performance from Richemont, given the shock of Burberry and Swatch Group yesterday,” Vontobel analyst Jean-Philippe Bertschy mentioned in a word to shoppers.
Whereas Richemont’s outcomes must be met with some aid, “the divergence in Jewelry and Watches performance will trigger questions around the inventory position in the latter,” Jefferies analyst James Grzinic mentioned.
Amid a generational shift in administration, Richemont — managed by South African billionaire Johann Rupert — lately named Nicolas Bos as group CEO. The corporate mentioned the previous head of its Vacheron Constantin watch model, Louis Ferla, would take over working Cartier, the French jewellery maker that’s Richemont’s high promoting model.
