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Richemont posted a slight rise in sales in the first quarter as solid results from its jewelry brands offset declines from China and its luxury watchmakers.\u00a0<\/p>\n
The Cartier owner reported a sales gain of 1% at constant currencies to \u20ac5.3 billion ($5.8 billion). That was in line with analyst forecasts and compares with double-digit gains a year earlier. The company said jewelry sales \u2014 which account for the bulk of its revenue and profit and also include the Van Cleef & Arpels and Buccellati brands \u2014 showed resilience, rising 4%.\u00a0<\/p>\n
Richemont shares edged down 0.5% in Zurich after initial gains. They\u2019re down 1.3% over the past 12 months.<\/p>\n
The Swiss company, which also owns watch brands Vacheron Constantin, Jaeger-LeCoultre and Piaget, is facing slowing demand for its pricey products, particularly in China, where consumers have turned cautious as the economy falters.<\/p>\n
Sales in Greater China plunged 27% during the quarter, the company said, while its watchmaking division posted an overall drop of 13%. Sales in all regions beyond Asia Pacific were higher.\u00a0<\/p>\n
Richemont\u2019s report follows worse-than-expected financial results from Swiss watchmaking rival Swatch Group AG, which posted\u00a0a 70% drop<\/a>\u00a0in profit it blamed on collapsing demand from China, and a\u00a0profit warning<\/a>\u00a0from luxury giant Burberry Group Plc.\u00a0<\/p>\n The quarter saw a \u201creassuring, robust sales performance from Richemont, given the shock of Burberry and Swatch Group yesterday,\u201d Vontobel analyst Jean-Philippe Bertschy said in a note to clients.<\/p>\n While Richemont\u2019s results should be met with some relief, \u201cthe divergence in Jewelry and Watches performance will trigger questions around the inventory position in the latter,\u201d Jefferies analyst James Grzinic said.<\/p>\n Amid a generational shift in management, Richemont \u2014 controlled by South African billionaire Johann Rupert \u2014 recently named Nicolas Bos as group CEO. The company said the former head of its Vacheron Constantin watch brand, Louis Ferla, would take over running Cartier, the French jewelry maker that is Richemont\u2019s top selling brand.\u00a0<\/p>\n<\/div>\nRecommended Newsletter: <\/strong>CEO Daily provides key context for the news leaders need to know from across the world of business. Every weekday morning, more than 125,000 readers trust CEO Daily for insights about\u2013and from inside\u2013the C-suite. Subscribe Now<\/a>.<\/div>\n<\/div>\n