Richemont Group's sales in Q3 (the three month period ended 31 December 2019) increased by 4%, with growth in all regions except Japan, the luxury goods group announced last week. The Jewellery Maisons division recorded a 6% increase year-over-year at constant exchange rates versus the prior period and 9% at actual exchange rates. Sales in Europe during the period grew by 9% to €1.26 billion ($1.40 billion) benefiting from favourable comparative numbers and strong sales in most markets. European sales for the nine months of the fiscal year have risen 8% to €3.5 billion ($3.9).
In Richemont's largest market, Asia Pacific, sales increased 2% to €1.43 billion ($1.59 billion), driven by strong double digit sales growth in China and Korea, which more than offset a "severe sales contraction" in Hong Kong and contrasted performances in other Asian markets. Sales in the Asia Pacific region for the first nine months to date have risen 4% to €4.16 billion ($4.61b). Q3 sales the Americas rose by 5%, led by good performances in the US that compensated for declines in other markets. The 3% sales increase in the Middle East and Africa reflected a good performance of retail (both online and offline) and favorable comparative numbers in a soft economic environment. Sales in Japan decreased by 7%, impacted by lower tourist spending given a comparatively stronger Japanese yen and the October 2019 value added tax increase that benefited first half sales.
The 6% sales progression at Jewellery Maisons was broad-based, driven by jewellery and watches across collections, the group noted. The performance of Cartier, Van Cleef & Arpels and Buccellati was particularly noteworthy given the negative impact of Hong Kong. Sales grew in all regions except Japan. Shares in the Swiss group rose more than 5% after the results as analysts were encouraged by the performance of its jewelry division and its ability to weather global challenges facing the luxury industry.
The Specialist Watchmakers registered modest sales growth, notwithstanding a challenging situation in Hong Kong with higher sales in directly operated boutiques and wholesale sales broadly in line with the prior year period. Swiss watchmakers are facing a severe decline in Hong Kong, their leading market, shaken by pro-democracy protests, while geopolitical tensions in other parts of the world and a profound reshaping of the watch retail network have also weighed. Richemont, with its high-end IWC and Jaeger-LeCoultre timepieces, is less exposed than peer Swatch Group (UHR.S) to competition from smartwatches, and has up to now been able to offset sluggish luxury watch sales thanks to its strong presence in the fast-growing jewelry category.