Richemont revenues miss estimates
Compagnie Financiere Richemont, the maker of Cartier jewellery, fell the most in more than a year in Zurich trading after reporting third-quarter revenue that missed analysts' estimates as Asia Pacific sales stopped growing.
The shares fell as much as 7.3 per cent, the biggest intraday decline since September 2011.
Richemont's Asia Pacific sales didn't rise in the October-December period for the first time in four years.
Total revenue rose 9.3 per cent to €2.86 billion in the three months through December, the Geneva-based maker of IWC watches said today in a statement.
Decelerating growth in China is a concern for luxury companies.
Chinese buyers account for 25 per cent of global luxury spending, according to a September HSBC Global Research report.
Third-quarter revenue growth slid to a halt in Asia Pacific, excluding currency swings, compared with growth rates between 34 per cent to 42 per cent in the final three months of 2009 to 2011.
Retailers in Hong Kong and mainland China became more "cautious," and it's unclear how revenue in the region will evolve, Richemont said.
"There are little clouds on the horizon, and there's going to be a period where the data are fragile," said Jon Cox, head of Swiss research at Kepler Capital Markets in Zurich.
China's economy expanded 7.8 per cent last year, the slowest pace since 1999.
Chinese consumers often buy watches in Hong Kong or Europe to avoid mainland China's taxes.
Hong Kong watch and jewellery retail sales fell for the first month in three years in August.
Watches are often given as business gifts in China, and purchases may be delayed ahead of the transition in the country's leadership, which began in November and will be completed in March, Mr Cox said.
The timing of the Chinese New Year, which is in February this year and was in January in 2012, may have also delayed some sales, he said.
Richemont's Baume and Mercier brand agreed to form a joint venture in mainland China with Chow Tai Fook Jewellery to distribute the Swiss brand's watches, the Chinese jeweller said January 19.