Luxury group Richemont has today reported weaker than expected earnings as the owner of Cartier jewellery brand 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, such as 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 US 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, short of the €10.34 billion expected by analysts.
The company posted a profit of €1.51 billion, worse than the €2.17 billion forecast by analysts.
"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."
Over the months from April to September, Richemont's results showed contrasting fortunes for its watches and jewellery businesses.
While jewellery - traditionally more resilient to economic swings - continued to shine with constant currency sales up 9%, watch sales fell 4%.
Analysts expected Richemont stock, which has gained 8.5% over the past 12 months, to react negatively to the results.
Still, despite missing sales and profit expectations, the company's performance in the US and in jewellery sales were better than expected, said Kepler Cheuvreux analyst Jon Cox.
He also noted that the outlook for a soft landing and expectations for improvement in China were "remarkably decent."
