Richemont’s 3Q Sales -4% Ex-Currency as Jewelry Outperforms Watches

Jan 14, 2016 7:57 AM By Rapaport News

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RAPAPORT... Richemont reported revenue – measured at constant exchange rates – declined 4 percent year on year in the third quarter that ended December 31 even as jewelry sales grew in most regions and product categories. Demand for watches was weak.

The slowdown reflected weaker trading in Europe than in the previous six months and continued challenging conditions in the Asia-Pacific region.

Total sales at actual rates during the three months increased 3 percent to $3.19 billion (EUR 2.93 billion), the Switzerland-based luxury group said in a statement January 14.

The U.S. dollar, Japanese yen and Swiss franc all strengthened against the euro during April-December 2015, compared with the same period in the previous year, propping up actual figures for the company, which reports in the European coinage.

Asia-Pacific sales fell 9 percent to $1.13 billion ex-currency as demand for watches continued to contract but the rate of sales continued to improve in mainland China. Sales in Hong Kong and Macau were significantly lower, mirroring many luxury retailers’ performance in the region in recent quarters.

Good demand for jewelry products helped limit the decline at Richemont’s maisons, whose sales still dipped 5 percent ex-currency to $1.75 billion on weak watch demand. The group’s specialist watchmakers – where revenue dipped 4 percent ex-currency to $901.5 million – suffered from caution in the wholesale channel, especially in Hong Kong, Macau and the Americas.

During the nine months to December 31, sales growth was flat at $9.55 billion at constant exchange rates but increased 11 percent at actual rates. Revenue from the jewelry maisons increased 2 percent ex-currency to $5.21 billion.

The challenging environment is likely to prevail in the fourth quarter to March 31, the company added.

Tags: asia pacific, data, Europe, luxury goods, Rapaport News, retail, retail sales, Richemont