ZURICH (Reuters) -Luxury group Richemont reported weaker than expected earnings on Friday as the owner of Cartier jewellery said the rising cost of living, economic headwinds and geopolitical tensions were weighing on customers’ spending.
The company, which also owns several high-end Swiss watch brands like IWC and Vacheron Constantin, is the latest luxury specialist to flag a slowdown in recent months as the post-pandemic spree wears off.
French rival LVMH last month reported a slowdown in demand for high-end goods in the United States and Europe where rising prices have prompted shoppers, especially younger generations, to cut back on spending.
Richemont’s constant currency sales growth eased from a 19% rate in the April to June period to a 5% rate in the following three months.
Overall for the six month period to the end of September, Richemont’s sales rose by 6% to 10.22 billion euros, short of the 10.34 billion euros expected by analysts.
The company posted a profit of 1.51 billion euros, worse than the 2.17 billion euros forecast by analysts in a consensus cited by Zuercher Kantonalbank.
“Growth eased in the second quarter as inflationary pressure, slowing economic growth and geopolitical tensions began to affect customer sentiment, compounded by strong comparatives,” said Chairman Johann Rupert in a statement.
“Consequently, we have seen a broad-based normalisation of market growth expectations across the industry.”
($1 = 0.9375 euros)
(Reporting by John Revill and Mimosa SpencerEditing by Miranda Murray & Shri Navaratnam)
