Richemont posts solid Q3 sales growth thanks to jewellery, Asia

Cartier maker Richemont said on Thursday solid sales growth in the quarter to Dec. 31 was driven by the Asia Pacific region and buoyant jewellery demand, kicking off the luxury goods reporting season on a positive note.

Swiss watchmakers’ sales and profits have been recovering over the last year from a severe downturn, fuelled by renewed appetite for luxury timepieces from the Chinese, their biggest buyers.

“Double digit growth in Asia Pacific was driven by mainland China, Korea, Hong Kong and Macau,” the world’s second biggest luxury goods group, also known for IWC and Piaget watches, said in a statement, without commenting on the outlook.

Sales growth in constant currency slowed as expected to 7 percent in the quarter, from 12 percent in the six months to Sept. 30, reflecting a return to growth in the final quarter of 2016.

The Asia Pacific region, which represents almost 40 percent of group sales, and Richemont’s jewellery brands, which include watches and jewellery made by Cartier and Van Cleef & Arpels, both grew 11 percent at constant currency.

“A beat on jewellery and Asia and the Middle East,” Kepler Cheuvreux analyst Jon Cox said.

“The fact the company is rationalising its watch wholesale distribution network while delivering a beat is impressive. The market is probably underestimating the ongoing positive environment for luxury goods,” he said.

The downturn had forced Richemont and peers like Swatch Group to clear excess inventory at retailers, offer cheaper products and open up to connected watches and online distribution.

Richemont also replaced almost its entire management team, including most of its brand heads, and in November appointed insider Jerome Lambert to lead the group’s watch and fashion brands.