Richemont, maker of brands Cartier and Van Cleef & Arpels, on Wednesday posted a 5% increase in quarterly sales led by strong growth at its jewelry brands in Asia Pacific and the Middle East.
Luxury watches sales have contracted sharply during the COVID-19 pandemic, but the jewelry category led by Richemont’s Cartier brand has fared better, motivating LVMH’s recent acquisition of US jeweler Tiffany.
Richemont, the world’s second biggest luxury group behind LVMH, said sales at constant exchange rates grew 5% in the company’s third quarter, while sales at current rates rose 1% to 4.19 billion euros ($5.09 billion).
The Geneva-based group did not give an outlook.
Shares were indicated to open 3.2% higher, according to pre-market data by bank Julius Baer.
It said it had seen strong growth in Asia Pacific with China up 80%, while Dubai in the Middle East had benefited from resumed tourist spending. Europe declined 20%, hit by the absence of tourism and store closures, and the Americas stagnated.
Jewelry brands Cartier and Van Cleef & Arpels posted 14% growth, while watch brands were down 4%.
“Richemont’s Xmas quarter was clearly ahead of expectations, which was mainly due to strong growth in Jewelry Maisons, which is also the main earnings contributor,” Vontobel analyst Rene Weber said, recommending to buy the stock.
Kepler Cheuvreux’s Jon Cox said declines in Europe were also less than feared. “There is clearly an appetite for luxury given pent-up demand,” he said.