Richemont (CFR.VX), the world’s second-largest luxury goods group, said sales growth in Asia had slowed markedly and Europe was now its fastest-growing region, helped by tourist spending and meaning it was keeping its first-half outlook unchanged.
The Asia-Pacific region is the fastest-growing luxury market in the world and has helped offset the impact of reduced spending elsewhere as austerity measures bite. But that effect could be fading as China’s red-hot growth starts to cool.
Sales to Asia Pacific grew 12 percent at constant exchange rates in the five months to end-August, down from 46 percent in its 2011/12 financial year to March, the Swiss maker of Cartier jewelery and IWC watches said on Wednesday.
But sales in Europe – where Asian shoppers often buy luxury goods while on holiday – rose 19 percent, only slightly down on a 2011/12 growth rate of 20 percent. Sales in the Americas slipped to 6 percent from 30 percent.
“Europe was strong, particularly in the retail channel in major tourist destinations. Demand in the Asia-Pacific region remained solid after two years of exceptionally high growth,” Richemont said ahead of its annual shareholder meeting.
Richemont shares were up 1.0 percent at 59.75 Swiss francs at 0850 GMT, compared with a 0.1 percent lower European personal and household goods index.SXQP.
“Better than expected results, driven by tourists in Europe,” Kepler analyst Jon Cox said.
Sarasin analyst Patrick Hasenboehler said the figures were better than most analysts had expected but not a great surprise, coming so soon after four-month data.
“The strong growth rate in Europe is a positive, whereas the growth rate in America is at the low end of expectations. A cause of uncertainty is the slowdown in China.” he said.
Richemont said total sales for the five months to end-August rose 13 percent in constant currencies – the same rate as in the first four months – and were up 23 percent on a reported basis, compared with 24 percent in the first four months.
Sales of jewelery rose 12 percent, while watches were up 16 percent. Its Montblanc brand – which Richemont said did not benefit as much from tourist spending – grew sales 4 percent.
It reiterated a forecast made a month ago for net profit and operating profit to rise 20-40 percent in the six months to end-September.
Richemont said the weakening of the euro against the dollar had a positive impact on reported sales, adding the six-month net profit figure could still be impacted by factors including adjustments to its foreign exchange hedging programme which would only be determined at the end of September.