* Sales up 24 pct at constant currencies
* Sales 2.62 bln euros vs 2.53 bln euros in poll
* Sees FY operating profit up significantly vs last year
* Shares rise 1.8 pct, outperform sector index
By Silke Koltrowitz and Victoria Bryan
ZURICH/GENEVA, Jan 16 Sales growth at
Richemont held up in the company's third quarter,
easing fears the sector might be in for a marked slowdown this
year and allowing the Swiss luxury goods group to confirm its
profit goal for the year.
The maker of Cartier jewellery and IWC watches said on
Monday sales rose 24 percent at constant exchange
rates between October and December against the year before,
beating forecasts for a 20 percent rise in a Reuters poll.
Buoyant Asian demand for pricey timepieces, as well as
Chinese tourists flocking to Europe's luxury boutiques, have so
far helped the industry sail relatively unscathed through the
latest bout of economic turmoil, though recent comments from
some in the sector have suggested this picture may be changing.
U.S. jeweller Tiffany & Co, which generates over
half its sales in the Americas, said last week Christmas sales
weakened markedly and lowered its full-year profit forecast.
Swiss rival Swatch Group SA warned sales growth
would slow to between 5 and 10 percent this year, compared with
almost 22 percent in 2011.
Company comments at this week's Geneva watch fair (SIHH),
which unites Richemont brands and some independent watchmakers,
could shed more light on the health of the luxury goods industry
and brands' expectations for the year.
Richemont gave no outlook for sales growth in the coming
year but confirmed its earlier guidance for a significant rise
in operating profit for its current fiscal year through March.
In a research note, analyst Thomas Chauvet at Citi saw sales
growth at Richemont slowing to 10 percent in fiscal 2013 on a
constant currency basis.
Richemont shares were trading 1.8 percent higher at 51.60
francs at 1414 GMT, outperforming a 0.7 percent rise in the
STOXX Europe 600 Personal & Household Goods index.
Richemont's sales reached 2.62 billion euros in the third
quarter against a forecast 2.53 billion, a "strong set of
figures" that contrasted with Tiffany's weak statement, analyst
Jon Cox at brokerage Kepler CM said.
"Growth is still above 20 percent, driven by Asia Pacific
obviously, but the biggest surprise is ... the ability of
tourists to buoy demand in Europe while the Americas is much
better than expected," he said.
Cartier CEO Bernard Fornas told Reuters in Geneva that the
brand, the largest in terms of sales at Richemont, expected to
perform better than the market in 2012.
"We are ambitious, optimistic yet cautious," he
said, adding he expected growth in Asia, the Middle East and
possibly the United States this year.
"Latin America and China have developed but are not yet at
full maturity," he said.
Sales in the Asia-Pacific region, which account
for 40 percent of Richemont's sales, rose 36 percent in the
third quarter, versus a 60 percent progression in the first
"The decline in the sales growth rate in the Asia-Pacific
region reflects demanding comparative figures and a general
convergence towards more sustainable, long-term growth rates,"
the group said.
Sales growth in Europe slowed to 15 percent from 22 percent
in the first half, while the Americas region, which decelerated
to 24 percent from 35 percent, was driven by strong demand for
jewellery and watches and a good performance by online retailer
"Despite strong figures, we retain our cautious stance on
hard luxury (items) compared to soft luxury especially given
signs of slowing sell out, including Chinese data as well as
weaker comparative same-store sales trends from Tiffany,"
another analyst said.
"Hard" luxury goods include watches and jewellery while
"soft" refers to accessories such as leather bags and clothes.
Swatch Group and Richemont shares shed around 15 percent of
their value last year, underperforming a flat sector index, as
markets price in a slowdown in watch sales this year.
Richemont trades at 15 times estimated March 2013 earnings
and Swatch Group at 13.9 times estimated 2012 earnings, both at
discounts to the world's top luxury group LVMH at 16.5
times -- which has a much greater exposure to soft luxury.