Shoppers pass a Cartier luxury store, operated by Cie. Financiere Richemont SA, in the Galeries Lafayette SA luxury department store in Paris, France.
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Cartier owner Richemont on Thursday reported a 10% increase in fiscal third-quarter sales even as China demand weighed, in a positive signal for the health of Europe’s luxury sector over the holiday shopping period.
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 dubbed its “highest ever” quarterly sales figure. That was well above 1% increase expected by analysts in a consensus cited by RBC, according to Reuters.
The company reported double-digit growth across all regions except Asia Pacific, where sales fell 7%, led by an 18% decline in the combined regions of mainland China, Hong Kong and Macau.
China, once a key driver of luxury demand, has been a major drag on the sector as it has struggled to emerge from a post-Covid-19 pandemic macro-economic slump.
The Swiss company’s share price has faced a volatile ride over the past year amid a rejig of its top management and wider fluctuations in the luxury market.
The stock jumped on the May appointment of Nicolas Bos, former head of the group’s Van Cleef & Arpels jewellery brand, as its new CEO. Shares are currently up 28.75% on the year.
Richemont shares y-o-y.
The results mark a return to growth for the company, which reported a 1% year-on-year dip in first-half sales to September, citing a challenging macroeconomic backdrop and tougher conditions in China. Sales for that six-month period came in at 10.1 billion euros.
The high-end group had until then been an outlier in a broader luxury downturn, reporting record full-year sales in May.
Luca Solca, senior analyst for global luxury goods at Bernstein, said that the Thursday results provided a positive early signal for the return to health of the wider luxury sector.
Europe and the Asia-Pacific region, excluding greater China, “have both seen strong sequential improvements, driven by higher domestic demand and strong tourist inflows, while Americas continue to be driven by strong local demand,” Solca said in a note.
“We take this as an encouraging sign and a confirmation — as anticipated by the market in recent weeks — that 3Q24 may have been a trough,” he added, referring to the calendar third quarter up to September.