Richemont sees “solid sales growth” in Q3
Luxury conglomerate Richemont saw “solid sales growth” in its third quarter last week, bolstered by strong demand in Asia, and the outperformance of its jewelry segment. The company said sales for the quarter were up 7% at constant currency from the same period a year ago, hitting €3.119 billion – in line with analysts’ expectations.
Richemont’s share price has risen by 25% over the past 12 months
SOURCE: Yahoo Finance
Richemont, which is famous for brands like Cartier and Van Cleef & Arpels, was hit along with other Swiss watchmakers when President Xi Jingping’s austerity drive muted Chinese demand for their wares. However, there are signs that this sentiment is reversing. The group said: “double digit growth in Asia Pacific was driven by mainland China, Korea, Hong Kong and Macau.”
The Asia Pacific region is worth almost 40% of Richemont’s group sales, and the company’s jewelry segment – which includes watches, as well as jewelry from its biggest brands – outperformed. Both Cartier and Van Cleef & Arpels saw constant currency growth of 11% from the year ago quarter.
Kepler Cheuvreux analyst Jon Cox put the results into perspective, saying: “A beat on jewellery and Asia and the Middle East. 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.”
Throughout the quarter, Richemont has replaced almost its entire management team, including most of its brand heads, and appoint Jerome Lambert to lead the its watch and fashion brands. So far, the reshuffle seems to be paying off.
Dominion holds Richemont in its Global Trends Managed Fund.
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