Shares slide as Richemont results fail to sparkle

The French firm, which owns Cartier, Van Cleef & Arpels, IWC and Chloe, among others, said revenues in the six months to 30 September dipped 1% to €10.1bn. Operating profits slid 17% to €2.2bn.

Analysts had expected sales of €10.21bn and profits of €2.45bn

Within that, second quarter sales fell 1% to €4.8bn, also missing expectations for a 2% uplift.

The biggest drag was China. Sales in Asia Pacific slid 19% over the six months, driven by a 27% slump in sales in China, Hong Kong and Macau. Asia Pacific is Richemont’s biggest region and is responsible for around a third of revenues.

"This decline reflects reduced consumer spending and strong comparatives, as well as the impact of higher sales to Chinese tourists outside of the region particularly in Japan," Richemont noted.

Watch sales in China were particularly hard hit. Richemont’s jewellery brands reported a 4% increase in global sales to €3.44bn, although that was still a smaller-than-expected rise. But its watches business reported a 19% slide in global revenues.

Johann Rupert, chair, said: "In the first half of this fiscal year, we continue to deliver sustained resilience in a world where uncertainty has become the norm.

"We saw solid sales growth across most of our regions, offsetting continued weakness in Chinese demand, which will take longer to recover and is particularly affecting our specialist watchmakers."

Chief executive Nicolas Bos, who took over earlier this year, told reporters that the slowdown in China was ongoing. "We have, of course, no clue on how long it will last and whether we reach the bottom or not," he said.

As at 1100 GMT, shares in Richemont had slid 6%, weighed down by both disappointing results and Beijing’s latest stimulus package falling to target domestic demand.

A number of rival luxury goods companies were also caught up in the sell-off. LVMH shed 4%, Hermes International was down 5% and Kering lost more than 6%.