Cartier-owner Richemont's quarterly sales raise fears of jewellery slowdown

By Alessandro Parodi and John Revill

ZURICH/PARIS, Nov 13 (Reuters) - Richemont shares fell as much as 9% on Friday as signs of cooling growth in the jewellery sector overshadowed a faster-than-expected rise in quarterly sales at the Cartier owner.

The Swiss-based company, which makes brooches, earrings and necklaces under the Cartier, Buccellati, Van Cleef & Arpels and Vhernier brands, has bucked the trend in a struggling luxury industry thanks to its higher exposure to jewellery.

But while second-quarter jewellery sales rose 14% to €4.41 billion ($4.88 billion) at constant currencies, the figure fell short of analyst expectations for 16% growth, according to a poll provided by RBC, leading analysts to question whether the slowdown was a cause for concern. Sales at the watchmaker division rose 12% to €833 million.

CEO Nicolas Bos told analysts that long-term jewellery trends remained positive as sales were driven by rising volumes, not just price increases.

"We have pricing strength; we just don't want to be greedy," Chairman Johann Rupert added.

Richemont shares were down 4.7% at 1045 GMT.

CHINA REMAINS SOFT

Richemont, which also owns Swiss watch brands Piaget and IWC, said total sales rose 13% to €5.95 billion in the three months to the end of September, above analysts' consensus forecast of €5.89 billion, according to Visible Alpha.

Though down from 20% growth in the first quarter, the figure showed the resilience of Richemont's business and a strong performance in the US, Japan and Europe, where sales increased by 15% or more.

Positive trends in Hong Kong and Macao compensated for a rather soft, but stable business in mainland China, Bos told journalists.

"China will come back; when, we don’t know, but it will come back," Rupert said.

RICHEMONT CUTS EXPOSURE TO TOURISM

The luxury conglomerate has halved its exposure to tourism to about 15% of total sales since the COVID-19 pandemic, Bos said, meaning most sales in Europe, Asia and America are to local buyers.

"It's very much a domestic-driven business these days, which we feel is actually much more solid and healthy in the long term," he said.

Richemont, which does not report quarterly earnings, said first-half net profit improved to €2.53 billion from €1.81 billion a year earlier, above analysts' consensus forecast of €2.26 billion.

DE BEERS, SUCCESSION

Asked about acquisitions, Rupert did not confirm talks to buy a stake in diamond miner De Beers from controlling shareholder Anglo American.

"In terms of possible acquisitions, we haven't made our mind up about anything," Rupert said. "Any investment we may make in diamonds will not make any meaningful difference to our balance sheet or profit and loss account."

The 76-year-old chairman also remained vague about succession, after the company appointed his son Anton as co-deputy chairman in September.

"I'm definitely not wedded to this," Rupert said. "We're having fun, I'm leaving a lot of decisions. The transition's already taken place."

($1 = 0.9042 euros)

(Reporting by Alessandro Parodi in Paris and John Revill in Zurich. Editing by Linda Pasquini and Mark Potter)