Luxury goods group Richemont posts lower than forecast revenues

Luxury goods giant Richemont SA reported a 9.3-percent rise in revenues for the fourth quarter of 2012 to US$3.81 billion (2.86 billion euros), but the figure was lower than analyst estimates and the firm's share was consequently hit hard.

Richemont, which owns the Cartier jewelry brand among others, saw its share drop more than 7 percent after it reported that Asia Pacific sales had not risen in the quarter for the first time in four years. Analyst estimates by Bloomberg had forecast an average revenue figure of US$3.88 billion (2.91 billion euro) for the Geneva-based maker of IWC watches.

The Asia Pacific region saw third-quarter revenue growth grind to a halt, excluding currency swings, compared with growth of 34-42 percent in the final quarters of 2009, 2010 and 2011.

Richemont said retailers in Hong Kong and Mainland China were increasingly "cautious," and there was uncertainty regarding revenue growth in the region.

The decline in spending by consumers in China has become a worry for luxury companies, since Chinese buyers account for a quarter of global luxury spending, according to a September HSBC Global Research report.

China's economy grew by 7.8 percent in 2012, which was the slowest rate of expansion since 1999. Although some Chinese often buy watches in Hong Kong or Europe to bypass taxes in Mainland China, Hong Kong watch and jewelry retail sales also fell for the first month in three years in August.

Some analysts believe the timing of the Chinese New Year, which falls in February this year and was in January in 2012, may have also delayed some sales.

Sales at Richemont's jewelry division, which accounts for about 50 percent of the company's sales, posted a 4-percent increase at constant exchange rates, well below the 10 percent rise analysts had expected.

Richemont's revenues from its watch subsidiary rose 9 percent, excluding currency shifts, lower than the average analyst estimate of 11 percent. Its watch-making brands, including Jaeger-LeCoultre and Lange & Soehne, generated about 25 percent of Richemont's sales in the final quarter.