Shoppers pass the Cartier luxury goods store operated by Cie. Financiere Richemont SA at the Galeries Lafayette department store in Paris, France.
Bloomberg | Bloomberg | Getty Images
Cartier owner Richemont Group Sales rose 10% in the fiscal third quarter despite pressure on demand in China, a report said Thursday, sending a positive signal about the health of Europe’s luxury goods industry during holiday shopping.
Sales rose to 6.2 billion euros ($6.38 billion) at constant exchange rates in the three months to the end of December, which the Swiss luxury brand said was its “highest ever” quarterly sales. Reuters reported that this was well above the 1% increase expected by analysts at Royal Bank of Canada (RBC).
The company reported double-digit growth in all regions except Asia Pacific, where sales fell 7%, with mainland China, Hong Kong and Macau down 18% combined.
China, once the main driver of demand for luxury goods, has been a major drag on the industry as the industry struggles to emerge from the macroeconomic recession following the Covid-19 pandemic.
The Swiss company’s shares have experienced volatility over the past year amid executive shakeups and broader volatility in the luxury goods market.
The company’s shares rose following the appointment in May of Nicolas Bos, the former head of the group’s Van Cleef & Arpels jewelry brand. The current share price is 28.75% higher than this year.
Richemont Group’s share price increased compared with the same period last year.
The results signaled a return to growth for the company, which reported a 1% year-on-year sales decline in the first half to September amid a challenging macroeconomic backdrop and tougher conditions in China. Sales for the six-month period were €10.1 billion.
Until then, the high-end group had been an outlier in the broader luxury downturn, with full-year sales hitting a record high in May.
Luca Solca, senior analyst for global luxury goods at Bernstein, said Thursday’s results provided a positive early sign of a return to health for the broader luxury goods industry.
Solca said in a report that Europe and Asia Pacific (excluding Greater China) “both saw strong sequential improvements driven by higher domestic demand and strong tourist inflows, while the Americas continued to be affected by strong local Driven by demand”.
“As the market has expected in recent weeks, we view this as an encouraging sign and confirmation that the third quarter of 2024 may be a trough,” he added, referring to the third quarter through September. quarter.
About The Author
