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Luxury group Richemont boosted by Asia recovery but Americas weigh

by Staff GBAF Publications Ltd
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Luxury group Richemont boosted by Asia recovery but Americas weigh

By John Revill

ZURICH (Reuters) -Luxury group Richemont reported a 14% increase in first- quarter sales on Monday, boosted by a strong rebound in Asia and demand for its high-end jewellery.

But the owner of Cartier and Van Cleef & Arpels jewellery also pointed to a downturn in the Americas, which weighed on its shares.

The shares, which have gained 53% in the last year, were down 3.1% in pre market activity in Zurich.

Richemont posted a 19% rise in organic sales which exclude the impact of currency movements while analysts expected 20%, Bernstein analyst Luca Solca noted.

“We would expect a muted reaction from the market to today’s announcement,” he said.

Richemont’s Asia-Pacific business boomed, helped by the lifting of COVID-related restrictions and reopening of borders, pushing the company’s sales 32% higher.

But the Americas, where concerns have risen in recent months about a slowdown in luxury demand in the United States, saw sales fall 4%, said the company, which also owns several high-end watch brands.

“Negative growth in the Americas is likely to temper some of the market expectations,” said Vontobel analyst Jean-Philippe Bertschy.

Overall, Richemont said its sales increased by 14% to 5.322 billion euros ($5.97 billion) in the three months to the end of June.

That was short of the 5.43 billion euros expected by analysts at Barclays and 5.54 billion expected by analysts at Bank Vontobel. Richemont does not report first quarter profit.

The sales increase was led by jewellery, where revenue rose by 19% to 3.60 billion euros.

The company’s specialist watchmakers, which include IWC, Piaget and Vacheron Constantin brands, posted a 6% increase in sales to 1.06 billion euros.

Rival Swiss watchmaker Swatch last week reported its highest ever half-year sales, buoyed by the removal of COVID-related restrictions in Asia.

($1 = 0.8908 euros)

(Reporting by John Revill; editing by Rachel More and Jason Neely)