LONDON (ShareCast) - (Sharecast News) - Shares in Cartier-owner Richemont glittered on Wednesday, after strong demand for the Swiss group's luxury jewellery brands boosted first-quarter sales, despite heightened geopolitical tensions.
Group sales at the Zurich-listed firm rose 20% at constant exchange rates in the three months to June end to €6.3bn, fuelled by a 24% spike in its jewellery maisons, which also owns Van Cleef & Arpels and Buccellati. Its fashion and watches divisions - which owns Piaget, Chloe and Dunhill, among others - showed 9% and 8% sales rises respectively.

Analysts had expected group sales to rise by a more modest 11%.

Within markets, there was double-digit growth across Richemont's three biggest regions, Europe, Asia Pacific and Americas, where robust domestic demand helped lift sales 27% to €1.7bn. In Europe and Asia Pacific, tourist spending was particularly strong, Richemont noted.

As at 1145 BST, the shares were trading up 5%. Peers were also buoyed, with Kering 3% stronger, LVMH up 1% and Burberry Group trading 1% higher at 1,083p.

Richemont said it had been a "strong start" to the year, with "excellent" jewellery growth. It added there it was ensuring "continued investment to support and cultivate maisons' growth against a persistently volatile macroeconomic and geopolitical backdrop driving elevated raw material costs".

Kathleen Brooks, research director at XTB, said: "This is a solid set of results that also highlights the shifting patterns of global consumption. Not so long ago it was Asian consumers, particularly in China, who propped up luxury sales. However, these days the US consumer is the chief purchaser of luxury items.

"Richemont is benefiting from the extremes of the luxury sector: it caters for high-end consumers who buy the most expensive jewellery, and the affordable luxury consumer.

"These results also bode well for [rival] luxury names."

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