PARIS — Hong Kong’s woes weighed on third-quarter growth at Compagnie Financière Richemont, with sales up 6 percent to 4.2 billion in the three months to Dec. 31.
Sales in the crucial pre-Christmas trading period rose 4 percent at constant exchange rates as Richemont’s jewelry houses, and Europe, notched the strongest growth.
In the first half of the year, Richemont reported a 9 percent increase in sales to 7.40 billion euros. At constant exchange, growth was 6 percent in the period.
In the first three months of fiscal 2019-20, sales were up 12 percent at actual exchange, and 9 percent at constant ones.
Jewelry delivered the most robust growth in the third quarter: Sales in the category were up 9 percent at actual rates to 2.16 billion euros.
The company said growth was “broad-based,” and driven by jewelry and watches across the various collections. “The performance of Cartier, Van Cleef & Arpels and Buccellati was particularly noteworthy given the negative impact of Hong Kong,” Richemont said.
Jewelry sales grew in all regions except Japan.
Sales at the specialist watchmakers climbed 4 percent to 818 million euros. Richemont’s online distributors Yoox Net-a-porter and Watchfinder saw growth of 5 percent. Sales dipped 1 percent in the “other” division, which includes brands such as Chloé, Dunhill and Maison Alaïa.
At actual exchange rates, Europe delivered the most robust growth, with sales climbing 10 percent, followed by the Americas with 9 percent, Asia-Pacific, 3 percent. Japan was down 1 percent, while the Middle East rose 6 percent.
Richemont said Europe benefited from favorable comparative numbers and strong sales in most markets. Sales in Asia-Pacific were boosted by “strong double-digit growth” in China and South Korea, which more than offset a “severe” sales contraction in Hong Kong, the company said.
The ongoing political protests in the region have forced temporary and permanent store closures, with all major brands across the luxury sector suffering severe consequences in what has traditionally been a high-growth market.
In North America, the U.S. compensated for declines in other markets, while sales in Japan were impacted by lower tourist spending, given a comparatively stronger Japanese yen and the October 2019 value-added tax increase that bolstered first-half sales, Richemont said.