By John Revill ZURICH (Reuters) -Richemont, the owner of Cartier jewellery, beat market expectations for third-quarter sales on Thursday, fuelling hopes that the luxury sector could be coming out of
Richemont's Sales Surge Fuels Luxury Market Hopes
By John Revill
ZURICH (Reuters) -Richemont, the owner of Cartier jewellery, on Thursday fuelled hopes of a revival for the beaten down luxury goods industry, with end-of-year sales that exceeded expectations, sending shares higher across the sector.
The company's robust performance over the all-important holiday season was seen as a signal that luxury sales may have turned a corner, even if Richemont mostly operates at the very high end of the market.
The Swiss company's sales jumped 10% year-on-year to 6.2 billion euros ($6.37 billion) for the three months to end-December, well ahead of analyst expectations for a 1% increase.
Shares in Richemont, which also owns Swiss watch brands Piaget, IWC and Jaeger-LeCoultre, rose 14%.
Rivals LVMH and Kering also got a boost, with both up more than 7%. Swatch was up as much as 10%.
Bernstein analyst Luca Solca described Richemont's sales as "an encouraging sign and a confirmation...that (the previous quarter) may have been a trough".
The industry is grappling with its lowest sales growth in years as shoppers, beaten down by economic uncertainty and high prices, have cut back on discretionary spending.
The gap between stronger and weaker players has been widening, with groups catering to the very high-end, like Hermes, outperforming those with a less wealthy customer base, such as Burberry.
Richemont had reported a 1% drop in sales during its second quarter after being hit by a downturn in Asia.
The company declined to comment on its future outlook.
Richemont said there remained a "challenging" situation in China, where third-quarter sales fell 18%, but this was more than compensated for by strong growth in other regions.
U.S. sales benefited from customers heading to the shops again after the uncertainty created by the November presidential election. A strong dollar boosted tourist purchases in Europe, while a weak yen also supported tourist purchases in Japan.
Sales in the Americas region accelerated, rising 22%, adding to initial signs of improvement in the U.S. market, where credit card spending on luxury labels in December turned positive for the first time in two years.
European luxury players are betting on American shoppers for growth this year, as Chinese appetite for high end goods has been dampened by the property crisis.
Richemont continued to spend on marketing and hosting events at its stores for high-end clients.
Kepler Cheuvreux analyst Jon Cox described Richemont's performance as excellent but was more cautious about the wider industry.
"It's probably too early to say whether this is a new inflection point for the luxury goods sector but certainly very encouraging," said Cox.
LVMH is due to report full-year results on Jan. 28, followed by Gucci-owner Kering and Birkin bag maker Hermes in February.
($1 = 0.9727 euros)
(Reporting by John Revill, additional reporting by Mimosa Spencer, Editing by Friederike Heine, Sonia Cheema, Kirsten Donovan and Jane Merriman)
