By John Revill
ZURICH (Reuters) -Richemont, the proprietor of Cartier jewelry, beat market expectations for third-quarter gross sales on Thursday, fuelling hopes that the posh sector could possibly be popping out of its current downturn.
The Swiss firm’s gross sales jumped 10% year-on-year to six.2 billion euros ($6.37 billion) for the three months to end-December, effectively forward of analyst expectations for a 1% improve.
The outcomes have been seen as a constructive signal for the excessive finish of the posh sector over the all-important vacation season.
Shares in Richemont (SIX:), which additionally owns Swiss watch manufacturers Piaget, IWC and Jaeger-LeCoultre, have been indicated 7% increased in premarket exercise, whereas rival Swatch was seen up 3.9%.
Bernstein analyst Luca Solca described the outcomes as “an encouraging signal and a affirmation…that (the earlier quarter) could have been a trough”.
Richemont had reported a 1% drop in gross sales throughout its second quarter after being hit by a downturn in Asia.
The corporate declined to touch upon its future outlook.
Though there remained a “difficult” state of affairs in China, the place third-quarter gross sales fell 18%, this was greater than compensated for by sturdy development in different areas, Richemont stated.
U.S. gross sales benefited from clients heading to the retailers after the uncertainty of the presidential election whereas the sturdy greenback boosted vacationer purchases in Europe. A weak yen additionally supported vacationer purchases in Japan.
Richemont continued to spend on advertising and internet hosting occasions at its shops for high-end shoppers.
However Kepler Cheuvreux analyst Jon Cox was cautious, regardless of describing Richemont’s efficiency as wonderful.
“It is most likely too early to say whether or not it is a new inflection level for the posh items sector however actually very encouraging,” stated Cox.
Rival LVMH is because of report full-year outcomes on Jan. 28, adopted by Gucci-owner Kering (EPA:) and Birkin bag maker Hermes in February.
The business is grappling with its lowest gross sales development in years as consumers, crushed down by financial uncertainty and excessive costs, have reduce on discretionary spending.
The hole between stronger and weaker gamers has been widening, with teams catering to the very high-end, like Hermes, outperforming these with a much less rich buyer base, similar to Burberry (LON:).
($1 = 0.9727 euros)