Richemont Shares Slump as US Revenue Unexpectedly Declines

Richemont shares declined after the Swiss luxury-goods maker reported an unexpected decline in sales from the Americas, raising concern over how weak the US market might get.

(Bloomberg) — Richemont shares declined after the Swiss luxury-goods maker reported an unexpected decline in sales from the Americas, raising concern over how weak the US market might get.

Revenue from the Americas declined 2% on a constant-currency basis in the three months through June, the Cartier owner said Monday as it reported an overall 19% gain in sales. The stock fell as much as 7.1%, the steepest intraday drop in a year.

The luxury-goods industry is depending on a bounceback from China to counter a slowdown in the US, which Chairman Johann Rupert said in May is at risk of a downturn. Last week, Burberry Group Plc reported a drop in revenue from the Americas as the low end of the luxury market in the US weakened.

Chinese demand may also be at risk. The country reported slower-than-expected economic growth Monday, with signs of a slowdown in consumer spending. Youth unemployment in the country has been above 20% for three months, a separate report showed.

Read more: China’s Growth Disappoints, Fueling Calls for More Stimulus

The Swiss company said its jewelery sales increased 24%, meeting analyst expectations, while its specialist watchmaker division reported sales growth of 10% at constant currencies, slightly below analyst consensus forecasts.

Rival Omega maker Swatch Group AG reported stronger-than-expected first-half results last week.

Richemont said an 11% sales increase in Europe was driven mainly by resilient domestic spending as well as tourism from the US, the Mideast and China.

(Updates with shares in second paragraph)

More stories like this are available on bloomberg.com