LONDON — Shares in Compagnie Financière Richemont fell 3.7 percent to 84.35 Swiss francs, or $90.30, in afternoon trading Wednesday after the company said sales growth in the first five months slowed to 1 percent on a reported basis, and 4 percent at constant exchange rates.
The parent of brands including Cartier, Van Cleef & Arpels, IWC and Dunhill, fell well short of analysts’ estimates and blamed its latest performance on currency headwinds and “subdued” demand for luxury goods worldwide.
Citi had expected sales at constant rates to hit 7 percent, while Exane BNP Paribas had expected 6 percent growth at constant rates. In the corresponding period last year, Richemont’s sales at constant rates grew 9 percent.
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Luca Solca, managing director and sector head of global luxury goods at Exane BNP Paribas, said in a short report that Richemont’s numbers are “unlikely to spark new investor interest for the luxury sector” and warned investors of a “slow ride” into the end of the fiscal year, which ends in March.
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“No inflection in consumer demand trends and trading momentum is in sight, while corporates are prepared for more of the same moderate organic growth,” he wrote.
On Wednesday, Richemont also held its annual general meeting in Geneva, where Johann Rupert was appointed chairman of the board.
Rupert, the company’s founder and shareholder of reference, had been on a year’s sabbatical. The outgoing chairman Yves-Andre Istel and Josua Malherbe, a non-executive director, were named deputy chairmen earlier this week.
Shareholders also approved a dividend of 1.40 Swiss francs, or $1.50, for the listed shares in the company.
The scheduled trading statement gave percentage figures only, and Richemont said the weakening of the dollar and the yen against the euro inflicted damage on the final, reported growth rates.
Full interim results will be reported on Nov. 7.
At both constant and actual rates, sales in Europe and the Middle East region were up 6 percent, with double-digit increases in the Middle East, and both regions continuing to benefit from tourism. However, sales growth remained low in Europe.
Sales in the Asia-Pacific region fell 2 percent at actual rates, and were flat at constant ones, with Hong Kong, Macau and Mainland China showing particularly slow growth.
In the Americas region, sales were up 7 percent at actual rates, and 12 percent at constant ones. In Japan, they plummeted 14 percent at actual rates, and fell 8 percent at constant ones.
The Richemont statement said that prudent consumer sentiment in Japan and a surge in purchases in March ahead of a sales tax increase dampened sales in the April-to-August period, as expected.
Jewelry sales were flat at actual rates and advanced 2 percent at constant ones, while the specialist watchmaker category advanced 2 percent at reported rates and 4 percent at constant ones.
Richemont’s “Other” category, which includes the brands such as Montblanc, Dunhill and Net-a-Porter Group, advanced 5 percent at actual rates, and 6 percent at constant ones.
Retail sales growth continued to outstrip wholesale sales, albeit at a lower level than a year ago, the company said, adding that the retail performances at Van Cleef & Arpels and at Net-a-Porter in particular were robust.
Cartier jewelry continued to outperform watches, which have suffered from weak demand and destocking, particularly in the Asia-Pacific region, according to the statement.