Richemont sales growth hit by weak Asia-Pacific demand
ZURICH (Reuters) - Cartier owner Richemont said that weakness in Asia-Pacific, its biggest market, weighed on sales growth in the five months to August.
Luxury watch makers are grappling with political instability in Hong Kong, the leading market for Swiss watches, and weak demand in China, where the government's fight against illegitimate gifting has hurt sales of expensive timepieces.
"In the Asia-Pacific region, sales were lower in Hong Kong, Macau and mainland China, offsetting positive developments in other markets," the Geneva-based maker of luxury watches and jewellery said on Wednesday ahead of its annual general meeting.
The overall pace of sales growth slowed to 4 percent in the five months to August on a constant currencies basis, against 9 percent in the same period last year. Sales were up 1 percent at actual exchange rates.
Analysts in a Reuters poll had expected sales to grow 6 percent on a constant currencies basis and 3.2 percent at actual exchange rates.
Sales in Asia-Pacific were flat at constant currencies, while in Europe and the Middle East they were up 6 percent. The company's fastest-growing region was the Americas, where sales rose by 12 percent.
Growth at Richemont's jewellery houses Cartier and Van Cleef & Arpels, which include Cartier watches, rose 2 percent, while specialist watch makers including brands such as IWC and Jaeger-LeCoultre recorded a 4 percent sales increase.
"This should put pressure on Richemont shares ... and on the sector as a whole as Richemont is the first company to report all the way to August," an analyst at JP Morgan wrote in a note.
Shares in Richemont were seen opening 2 percent lower on Wednesday, according to premarket indications by bank Julius Baer .
U.S. jeweller Tiffany raised its full-year profit forecast last month after strong sales and higher prices for its high-end jewellery in the Americas boosted profits, but Richemont is more exposed to Europe and Asia.
(Reporting by Joshua Franklin and Silke Koltrowitz; Editing by Edwina Gibbs and David Goodman)
