Cartier owner Richemont posted Friday a hefty drop in net profit for the first half of the year as watch sales sank in China, where weak consumer spending has hit the luxury sector.
Richemont said its profit after tax reached 457 million euros ($492 million), down from 1.5 billion euros in the same six-month period last year as it booked a 1.2-billion-euro write-down from the sale of its Yoox-Net-A-Porter online fashion business.
Its net profit for continuing operations was 1.7 billion euros ($1.8 billion) in the six-month period ending in September, 20 percent lower than in 2023 and less than expected by analysts polled by Swiss news agency AWP.
Global sales fell one percent to 10.1 billion euros.
Sales from the Asia-Pacific region were down by almost a fifth while all other regions in the world posted “solid growth”, Richemont said in a results statement.
Citing “reduced consumer spending” in China, Richemont said growth in other Asian countries was “more than offset” by a double-digit drop in sales in the world’s second biggest economy.
“The global watch market is experiencing a slowdown, particularly in China, which is affecting all watchmaking brands globally, with the high-end segments showing greater resilience,” Richemont chairman Johann Rupert said in the statement.
He said Chinese demand “will take longer to recover”.
Last month, French group LVMH, the world’s biggest luxury company whose brands include Louis Vuitton, Dior and Bulgari, reported a 4.4 percent drop in third-quarter sales.
Gucci owner Kering said its sales sank 15 percent in the same quarter due to slowing consumer spending in China.
Richemont’s stock price fell more than four percent in the Swiss stock exchange.
“There is a slowdown in China that we are experiencing like our competitors,” Richemont chief executive Nicolas Bos said in a conference call.
“We have no clue on how long it will last and whether we’ve reached the bottom or not,” he said.
