Richemont sees “solid sales growth” in Q3
Select language to see a machine translation of this article. The original language of the Article is English and the translation is provided for your convenience.

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

graph 0115 richemont

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.

Disclosure

Dominion holds Richemont in its Global Trends Managed Fund.


If you would you like to receive the Newsfeeds daily, please click here to sign up now!

Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
0.0/5 rating (0 votes)

Disclaimer
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.