LONDON – Compagnie Financière Richemont saw sales in the first fiscal quarter surge 14 percent to 5.32 billion euros, fueled by a strong rebound among Chinese tourists and locals, the luxury giant said in a trading update on Monday.
At constant exchange rates, year-on-year sales were up 19 percent, with mainland China growing in the double digits and Hong Kong and Macau seeing triple-digit increases.
The quarterly gains did not impress investors, with Richemont shares falling 8 percent to 141.55 Swiss francs in morning trading.
Richemont’s three jewelry maisons – Cartier, Van Cleef & Arpels and Buccellati – grew 24 percent in the three months to June 30, while sales in the watch division were up 10 percent.
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The company’s other brands division, which includes Chloé, Delvaux and Dunhill, rose by 6 percent at constant exchange rates.
Richemont said the surge in China was due to favorable comparatives with the corresponding period last year; the lifting of lockdown restrictions; and the subsequent rebound in tourism across the entire Asia-Pacific region.
By contrast, sales in the Americas were down 2 percent due to lower wholesale sales in the region which has been impacted by a cost of living crisis, rising interest rates and an overall slowdown in luxury spending on the part of the aspirational consumer.
Retail sales in the Americas were flat against last year.
In Europe, sales were up 11 percent against demanding comparatives from the prior year. Richemont said that growth came from spending by locals, and tourists from the Americas, the Middle East and, more recently, China.
Richemont noted that most markets, particularly France, Italy and Switzerland, generated higher sales in the period.
Yoox Net-a-porter, which is now considered a discontinued operation following a proposed deal to sell a majority to Farfetch and Alabbar, saw sales shrink by 8 percent at reported rates and 10 percent at actual ones.
Richemont said the decline was due to a “globally challenging environment” for digital distribution pure players.
The company’s net cash position as of June 30 was 6.6 billion euros, compared with 5.4 billion euros in the corresponding period last year.
This story was reported by WWD and originally appeared on WWD.com.
