ZURICH/PARIS (Nov 13): 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 (US$4.88 billion or RM19.9 billion) at constant currencies, the figure fell short of analyst expectations for 16% growth, according to a poll provided by RBC. Sales at its watchmaker division rose 12% to €833 million.

"Investors will debate at first if a quicker normalisation of growth in (Jewellery Maisons) should be a worry", brokerage Jefferies said in a note to clients.

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 weakness in mainland China, CEO Nicolas Bos told journalists.

"The confidence factor in mainland China is still not at its all-time high, and we see still a rather soft business, although stable", he said.

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.

Bos declined to comment on reports that Richemont could join a consortium bidding for a majority stake in diamond miner De Beers. He said natural precious stones were important for its jewellers, and would remain so.

The company's 76-year-old chairman, Johann Rupert, also skirted questions 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".

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