Raul Ariano, Bloomberg via Getty Images
TAKEAWAYS :
- European luxury stocks jumped after Cartier parent Richemont announced record quarterly sales.
- Richemont's results raised investor hopes that the high-end sector is recovering from the slump induced by weak Chinese demand.
- Richemont’s stock rose by almost 16 percent in Swiss trading. Shares of Burberry, LVMH Kering and Hermes also increased in European trading.
European luxury shares rose Thursday following the release of Richemont’s record-breaking quarterly sales. The news raised hopes among investors that high-end retail is recovering after a long slump due to weak Chinese demand.
Swiss company reported that sales in the third quarter ended Dec. 31, rose by 10% over last year to 6,15 billion euros. Strong sales at its jewelry brands—Buccellati, Cartier, Van Cleef & Arpels, and Vhernier—offset a decline in watch sales.
Richemont said that it registered double-digit growth in the Americas, Europe, Middle East & Africa, and Japan, and a "slower decline in Asia Pacific despite still challenging demand in China." The sales in Mainland China and Hong Kong fell 18%.
China’s economic slowdown has affected domestic consumer spending.
Burberry, LVMH and other luxury stocks jump after news
Stocks in Burberry, the British designer of trenchcoats, LVMH the manufacturer of Louis Vuitton and other luxury products, Gucci owner Kering and Birkin handbag producer Hermes jumped after the announcement.
Richemont rose by 15% during Swiss trading while Burberry gained more than 5 % in London. In Paris, LVMH Kering Hermes and all were up by at least 5%.
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