By Andrea Figueras

Swiss luxury group Richemont said it saw an improvement across all business areas and reported better-than-expected sales for its fiscal third quarter, in the midst of a downward trend in demand for luxury goods that is weighing on most high-end brands.

The owner of Cartier said Thursday that it made sales of 6.15 billion euros ($6.33 billion) for the three months to Dec. 31, its highest ever quarterly sales, up 10% compared with the prior-year period at both actual and constant exchange rates.

The result surpasses analysts' projections of 5.63 billion euros, according to a poll of estimates compiled by Visible Alpha.

Against a backdrop of slowing demand for luxury goods buffeting the sector, the Swiss company was seen as a resilient player thanks to its heavyweight brands Cartier and Van Cleef & Arpels. The strength of Richemont lies in its exposure to jewelry, which is a popular category, as it is seen as a long-term investment purchase, Barclays analysts Carole Madjo and Wendy Liu said in a note before results.

The company's core jewelry division recorded third-quarter sales of 4.5 billion euros, up 14% on year and ahead of analysts' forecasts of 4.11 billion euros.

"We view these results as exceptionally strong," RBC Capital Markets analysts Piral Dadhania and Nikolaos Lafioniatis said in a note. Richemont is executing very well its key business, benefiting from strong momentum at Cartier and Van Cleef & Arpels in particular, in a more favorable scenario for the jewelry category, the analysts said.

The company's update comes just days after Italian luxury fashion firm Brunello Cucinelli said it is positive about its growth plans in the coming years after it reported higher-than-expected revenue for the fourth quarter, helped by its well-heeled clientele.

Wealthier consumers have continued to indulge in luxuries despite the global slowdown, thanks to their resilience even in times of economic woes. This has led to polarization trends in the performance of luxury brands, with those exposed to these customers faring better.

The company said that sales in the Americas grew 22%, with increases across all business areas helped by strong local demand.

Barclays analysts had anticipated a potential improvement in U.S. trends owing to the absence of uncertainty around the elections, which had previously dragged down consumer spending.

Meanwhile, the group's specialist watchmakers division reported an 8% decline in quarterly sales to 867 million euros. This was, however, better than anticipated, as analysts had forecast sales of 802.5 million euros.

The watches division has been recording weak results, as it is highly exposed to China, a market where luxury companies are struggling with sliding demand as high-end buyers have reduced their spending on pricey goods in light of the country's economic woes.

Demand is still challenging in China, the group said.

In addition, the latest data from the Federation of the Swiss Watch Industry showed a continued decline in exports of Swiss watches, with those to China and Hong Kong being particularly poor and weighing heavily on the global trend.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

January 16, 2025 01:44 ET (06:44 GMT)

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