Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

Cartier owner Richemont sees growth easing as economic worries rise

Published Nov 10, 2023 06:12 Updated Nov 10, 2023 09:46
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Jewellery is displayed at a Cartier store on Place Vendome in Paris, France, July 2, 2019. REUTERS/Regis Duvignau/File Photo/File Photo
 
0QMU
-0.38%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By John Revill and Mimosa Spencer

ZURICH (Reuters) -Luxury group Richemont (LON:0QMU) cautioned on Friday that economic worries and global tensions were weighing on consumer spending as the owner of Cartier jewellery reported first-half profits that missed forecasts, sending its shares down 6%.

The Swiss company, which also owns several high-end Swiss watch brands, such as IWC and Vacheron Constantin, is the latest luxury specialist to flag a slowdown in recent months as the post-pandemic spree wears off.

French rival LVMH (EPA:LVMH) last month reported a slowdown in demand for high-end goods in the United States and Europe where rising prices have prompted shoppers, especially younger generations, to cut back on spending.

Richemont on Friday joined what Bernstein analyst Luca Solca called the "moderation club," reporting constant currency sales growth easing to a 5% rate in July to September.

Sales had increased by 19% in the April to June period.

Richemont Chairman Johann Rupert said inflation, slowing economic growth and geopolitical insecurities were dampening sentiment, while the full effects of rising interest rates were still to be seen.

"It's no surprise to us that the market will slow down and across all asset classes, because that's the purpose," Rupert told reporters, referring to higher interest rates.

The post-COVID feel-good factor in China had also dissipated, as a property crisis and record youth unemployment have weighed on sentiment.

"They're not going out to bust their credit cards," Rupert said referring to Chinese customers, who make up 30% of Richemont's sales. "There is a bit of caution on their side."

Still, Rupert said Richemont was well equipped to withstand the slowdown, with cash on hand to continue investing in boutiques, products and marketing.

"I'm very positive about the medium term outlook. I've been involved with Cartier since 1976, trust me, I've seen a bunch of ups and downs and ups and downs," he said.

"So, I'm not concerned about the next three to five years. Certainly, we will use the opportunity to gain market share because we're in a position to support ourselves."

In the six months to the end of September, Richemont's sales rose by 6% to 10.22 billion euros ($10.9 billion), short of the 10.34 billion euros expected by analysts, while profit of 1.51 billion euros was below 2.17 billion euros forecast by analysts in a consensus cited by Zuercher Kantonalbank.

Still, despite missing sales and profit expectations, the company's performances in the United States and in jewellery sales were better than expected, said Kepler Cheuvreux analyst Jon Cox, noting the outlook for a soft landing and expectations for improvement in China were "remarkably decent."

($1 = 0.9379 euros)

Cartier owner Richemont sees growth easing as economic worries rise
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email