Cartier Gharial emerald and diamond necklace.

PARIS Bringing a measure of optimism to the high-end sector, brisk business in Asia spurred Compagnie Financière Richemont’s third-quarter financial performance, helping it post a 1 percent sales increase over the crucial holiday period.

The results offer an initial glimpse of business — particularly in the high-end segment of jewelry and watches — ahead of a spate of results from other luxury groups, including LVMH Moët Hennessy Louis Vuitton, Kering and Hermès, at a time when the industry continues to be buffeted by the coronavirus crisis.

“Richemont produced a high-quality [third quarter] update,” noted analysts at Bernstein, in an emailed note to clients, citing the strength of its jewelry houses, which include Cartier.

The results point to likely strength from other luxury groups, added the analysts.

At constant exchange rates, the rise in sales for the three months ending Dec. 31 came to 5 percent at 4.19 billion euros, driven by 25 percent growth in Asia-Pacific.

Sales declined 20 percent in Europe, which has been deprived of deep-pocketed tourists as global tourism remains on hold. Sales rose 3 percent in the Americas region at constant rates, while the Middle East and Japan clocked 27 percent and 1 percent growth, respectively. Richemont flagged resumed tourist spending in Dubai and strong domestic consumption in Saudi Arabia.

Cartier and Van Cleef & Arpels supported the performance of the jewelry division, which gained 14 percent, growing in all regions except Europe. The specialist watchmakers activity, meanwhile, posted a 4 percent decline, reflecting ongoing challenges.

Exports of Swiss watches, a key industry indicator, have declined 23.5 percent over 11 months of last year. Growth in demand from mainland China has helped improve the performance in recent months, as the country widens its lead over other markets.

“We take the Richemont update as another clear data point that leading players in the luxury goods sector continue a strong progression in [the second half of last year] despite the second wave of COVID-19 lockdowns in Europe,” noted the analysts at Bernstein.

The results come as especially good news for the sector as higher COVID-19 cases in China has cast further uncertainty on business, the analysts also said.

“The quarter under review was characterized by a varied performance across regions, with the continued spread of COVID-19 resulting in a halt in international tourism and temporary closures at points of sales in line with changing local lockdown measures,” noted Richemont, which also owns Chloe, Piaget, Dunhill and other high-end labels.

Sales through online channels offered a lift, rising 17 percent and outpacing an 8 percent increase in retail and an 8 percent decline in wholesale channels and royalty income.

In November, Richemont entered a mega-deal with its China partner Alibaba, and with Farfetch, to accelerate growth in that market. The new venture was also supported by Artemis, an investment vehicle owned by the Pinault family, which also owns Kering.

Analysts have expected strength from Cartier as consumers focus on top brands, helping them grow market share during the current, choppy business environment.

“What really counts from a financial point of view, Cartier, the key asset of the group, is well placed and likely to impress,” said Erwan Rambourg, an analyst with HSBC, last week. Rambourg recently upgraded Richemont to buy from hold and raised the target price to 94 Swiss francs from 83 Swiss francs, noting despite shutdowns in Europe, which likely affected November sales, leading luxury labels are increasing market share as consumers focus on “buy less, buy better.”

Richemont sales over the nine month period to the end of December decreased by 14 percent at constant exchange rates.

Luxury groups reporting full-year financial results in the coming weeks include LVMH on Jan. 26, Kering on Feb. 17 and Hermès on Feb. 19.

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