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(Sharecast News) - Luxury group Richemont shrugged off volatile geopolitical and economic conditions to post above-forecast interim earnings on Friday, driven by strong demand for its jewellery brands.
The Swiss owner of Cartier and Van Cleef & Arpels saw group sales sparkle 16% in the six months to 30 September, to 12.3bn, following a 13% spike in the second quarter. Interim net profits surged 39% to an above-forecast 2.5bn.
Driving the growth was an "excellent" performance at its jewellery maisons, Richemont said, where sales rose 19% over the half year on a constant currency basis to 9.1bn. Sales also improved Richemont's smaller watches and fashion units, up 10% and 9% respectively.
However, the Zurich-listed stock had shed 6% by 1000 GMT, after second-quarter jewellery sales growth missed expectations, slowing to 14% from 24% in the first quarter. Analysts had been hoping for a slightly higher rate of growth, at around 16%.
Chair Johann Rupert said Richemont - which also owns Piaget, Chloe, Dunhill and Montblanc, among others - had delivered "strong results in a volatile geopolitical and macroeconomic environment" and amid a "challenging fashion market".
He continued: "These results reflect the strength of our long-term strategy and demonstrate the enduring attractiveness and relevance of our maisons' positioning."
Rupert remained cautious looking forward, however. He said: "While we cannot predict what lies ahead, we expect the macroeconomic and geopolitical environment to remain volatile for the foreseeable future. These conditions reinforce the importance of maintaining operational discipline while continuing to invest in people, creativity and craftsmanship."
The luxury industry has been buffeted by headwinds this year, not least of which is war in the Middle East. The conflict has hit sales in the region, disrupted travel, undermined sentiment and caused inflationary pressures to mount. Sales in the Middle East and Africa fell 2% over the half-year at Richemont.
Global demand for jewellery has up better than it has for fashion, however.
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