|Richemont China luxury sales soften, Asia business slows
Swiss luxury goods giant Richemont said sales growth had slowed during the first five months of its reporting year amid unfavorable exchange rates and slumping sales in mainland China.
From April to August, Richemont sales grew just 4 percent at actual exchange rates and 9 percent at constant rates, it said in a statement.
Following the announcement, its share price slumped 3.58 percent to 90.10 Swiss francs per share in mid day trading compared to a drop of just 0.28 percent for the Swiss stock exchange's main index, AFP reports.
The world's second largest luxury goods group, which owns the Cartier, Piaget, Jaeger-LeCoultre and Montblanc brands among others, is very sensitive to currency movements and was especially hard-hit by variations in US dollar and yen values against the euro.
In Japan, for instance, Richemont revenues soared 17 percent in the local currency but dropped 8 percent in euros.
In the Asia Pacific, sales meanwhile slowed significantly, climbing only 1 percent compared to the year-ago period.
Strong sales in Hong Kong and Macau were resolutely offset by dwindling sales in mainland China, "largely reflecting a prudent consumer sentiment after several years of exceptional expansion,'' Richemont said.
In Europe and the Middle East, sales remained strong, boosted by a steady stream of visitors to major tourist destinations, while growth in Americas climbed amid strong demand for jewellery, it said.
Across all regions, Richemont's jewelry brands meanwhile saw a clear slowing of sales growth to just 2 percent, down from a 23 percent during the year-ago period.
Richemont is set to publish its half year results on November 8.