By Andrea Figueras


Cartier owner Richemont reported a small drop in sales for its fiscal first quarter amid slowing demand for luxury goods, particularly in China.

The company's sales grew across all regions, except for Asia-Pacific, due to sharp declines in China, Hong Kong and Macau, reflecting a low level of consumer confidence, it said Tuesday.

The Swiss jeweler and watchmaker became the latest luxury company to sound the alarm about Chinese demand. On Monday, luxury peers Burberry and Swatch noted a challenging business environment, particularly in China, while Germany's Hugo Boss cut its sales guidance for the year.

For the period ended June 30, the luxury-goods group booked sales of 5.27 billion euros ($5.74 billion), compared with EUR5.32 billion in the prior-year period. The result came broadly in line with analysts' forecasts of EUR5.28 billion, according to a poll of estimates compiled by Visible Alpha.

Sales in China, Hong Kong and Macau, plummeted 27% during the quarter.

Investors are scrutinizing how companies fare in China, as the country faces a slower-than-expected recovery from the Covid-19 pandemic, compounded by a downturn in the real-estate market.

Chinese consumers have been one of the key debates in the luxury space, as high-end shoppers--which have for years fueled the sector's growth--have cut their spending on expensive clothes, bags and accessories. According to the latest economic data, China's economy slowed sharply in the second quarter, driven in part by a slump in consumer spending.

As analysts had expected, the group reported a diverging performance for its two main divisions. Jewelry Maisons--the core business that houses brands Cartier and Van Cleef & Arpels, closely watched by investors--saw a 4% increase in sales at constant exchange rates to EUR3.66 billion. Analysts had forecast sales of EUR3.64 billion for the key division, according to Visible Alpha.

Meanwhile, the specialist watchmakers business reported a 13% sales decline at constant exchange rates to EUR911 million due to its strong exposure to Asia-Pacific.

The result compares with analysts' prospects of EUR996.6 million. The division--home to brands such as Piaget and Vacheron Constantin--was expected to experience a weak quarter due to softer Swiss watch exports data in recent months, which shows a continued deterioration since June last year.


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


(END) Dow Jones Newswires

07-16-24 0300ET