Cartier-owner Richemont's sales beat boosts luxury sector as jewellery shines
ZURICH, - Cartier brand owner Richemont gave a boost to the broader luxury sector on Wednesday after the Swiss-based group comfortably beat sales forecasts for its first quarter with accelerating demand for its jewellery and watches.
Richemont, which also owns Swiss watch brands Piaget and IWC, said its sales rose by 20% when measured in constant currencies to €6.33 billion ($7.24 billion) in the three months to the end of June.
The figure beat analyst forecasts for €5.90 billion in a consensus compiled by Visible Alpha, a "flabbergasting" result, said Bank Vontobel.
The result sent Richemont's shares 6% higher in early trading, while the Stoxx European Luxury 10 index, which includes other industry heavyweights LVMH, Hermes and Kering, rose 2.5%.
Investors were encouraged by Richemont's positive comments on the greater China region, where sales rose at a double-digit rate, although analysts said the lower exposure of other luxury groups to the fast-growing jewellery segment would limit any wider read-across.
Richemont's jewellery business, which also includes Van Cleef & Arpels, Buccellati and Vhernier, saw its sales rise by 24%, much better than the 13.5% rate expected by analysts.
Bernstein analyst Luca Solca said Richemont was benefiting from growth at both ends of the luxury market, with demand for high-end jewellery among the ultra-wealthy and value-for-money products among aspirational consumers.
"When spending $3,000-$4,000, a middle-class consumer is more likely to favour jewellery over a bag for example because they can wear a ring, bracelet or necklace every day and it's seen as having a longer life," he said.
Growth in the jewellery business was broad-based, and not limited to high-end jewellery pieces, which are often one-off creations retailing for between $40,000 and more than $1 million each.
Richemont, which also owns Swiss watch brands Piaget and IWC, said its sales rose by 20% when measured in constant currencies to €6.33 billion ($7.24 billion) in the three months to the end of June.
The figure beat analyst forecasts for €5.90 billion in a consensus compiled by Visible Alpha, a "flabbergasting" result, said Bank Vontobel.
The result sent Richemont's shares 6% higher in early trading, while the Stoxx European Luxury 10 index, which includes other industry heavyweights LVMH, Hermes and Kering, rose 2.5%.
Investors were encouraged by Richemont's positive comments on the greater China region, where sales rose at a double-digit rate, although analysts said the lower exposure of other luxury groups to the fast-growing jewellery segment would limit any wider read-across.
Richemont's jewellery business, which also includes Van Cleef & Arpels, Buccellati and Vhernier, saw its sales rise by 24%, much better than the 13.5% rate expected by analysts.
Bernstein analyst Luca Solca said Richemont was benefiting from growth at both ends of the luxury market, with demand for high-end jewellery among the ultra-wealthy and value-for-money products among aspirational consumers.
"When spending $3,000-$4,000, a middle-class consumer is more likely to favour jewellery over a bag for example because they can wear a ring, bracelet or necklace every day and it's seen as having a longer life," he said.
Growth in the jewellery business was broad-based, and not limited to high-end jewellery pieces, which are often one-off creations retailing for between $40,000 and more than $1 million each.
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