Sep 7, 2011
Richemont five-month sales beat expectations
Sep 7, 2011
ZURICH, Sept 7 (Reuters) - Swiss company Richemont , home to brands such as Cartier, beat expectations for five-month sales, helped by Asia, and said while first-half sales would be significantly higher, net profit was likely to be flat due to the strong Swiss franc.
The world's second-largest luxury goods group, which competes with Swatch and LVMH , posted a 35 percent jump in five-month sales in constant currencies on Wednesday, beating expectations.
Richemont said the uncertain economic outlook for the West was likely to weigh on demand for its watches and jewellery.
Chief executive and chairman Johann Rupert said: "The rest of the financial year is difficult to predict. The problems of fiscal deficits generally and euro zone difficulties in particular are likely to act as a drag on business prospects".
His comment echoed those of Philippe Merk, chief executive of independent watchmaker Audemars Piguet, who told Reuters in a recent interview the declining mood in Europe and North America would not leave the watch industry unscathed.
At actual exchange rates, Richemont sales were up 29 percent in the five months from April to August, also ahead of the estimate of 17 percent in a Reuters poll.
The Asia-Pacific region is still leading the way with a 59 percent rise, while sales were up 22 percent in Europe and 41 percent in the Americas region. Disaster-shaken Japan saw sales grow 8 percent at constant currencies.
"The figures are far ahead of expectations with positive surprises all over, especially for Asia and the Americas, therefore beating all first-half figures from EU peers," Vontobel analyst Rene Weber said.
Richemont shares, which had slumped over 20 percent this year on worries about the strong Swiss franc hitting its business, were indicated to open nearly 4 percent firmer, according to pre-market data provided by Clariden Leu
Makers of luxury goods have been benefiting from increasing consumer spending in emerging markets like China, making them less vulnerable to a potential economic slowdown in Europe and North America.
(Reporting by Silke Koltrowitz; Editing by Dan Lalor)
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