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Shoppers pass a Cartier luxury store, run by Cie. Financiere Richemont SA, in the Galeries Lafayette SA in Paris, France.
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The owner of Cartier Richemont on Thursday reported a 10% rise in fiscal third-quarter sales even as demand from China weighed on, in a positive sign for the health of Europe’s luxury sector during 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 called its quarterly sales figure ” higher than ever.” That was well above the 1% increase expected by analysts in a consensus cited by RBC, according to Reuters.
The company reported double-digit growth in 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 macroeconomic crisis.
The Swiss company’s share price has faced a volatile run over the past year amid a rejig of its top management and wider fluctuations in the luxury market.
The stock market jumped on the May appointment of Nicolas Bos, former head of the group’s Van Cleef & Arpels jewelry brand, as its new CEO. Shares are currently up 28.75% on the year.
Richemont I share.
The results mark a return to growth for the company, which reported a 1% year-on-year decline first half sales in September, citing a challenging macroeconomic background and tougher conditions in China. Sales for that six-month period came to 10.1 billion euros.
The high-end group was until then an outlier in a wider decline in luxury, record ratio sale of the whole year in May.
Luca Solca, senior analyst for global luxury products at Bernstein, said Thursday’s results provided a positive initial signal for the broader luxury sector’s return to health.
Europe and the Asia-Pacific region, excluding greater China, “both saw strong sequential improvements, driven by higher domestic demand and strong tourist inflows, while the Americas continued to be driven by strong demand local,” Solca said in a statement.
“We take this as an encouraging sign and a confirmation – as anticipated by the market in recent weeks – that 3Q24 could have been a fall,” he added, referring to the third quarter of the calendar until September.
