Johannesburg - Cie. Financiere Richemont SA, the maker of Cartier jewelry and IWC watches, said full-year net income rose about 30 percent, more than analysts expected, as the the dollar’s strength against the euro boosted sales growth.
Operating profit gained about 18 percent in the year through March as sales advanced 14 percent, the Geneva-based company said in today in an unscheduled statement ahead of the scheduled May 16 results.
Revenue rose 9 percent excluding currency shifts.
Analysts expected a 25 percent gain in net income and an 18 percent increase in operating profit, according to the average of 17 and 18 estimates.
The profit increase was the slowest in three years as the market for Swiss watches slows.
Swatch Group AG Chief Executive Officer Nick Hayek said last month the industry needed to “calm the spirits” on expectations as growth in the market will probably be 5 percent to 10 percent this year compared with rates of as much as 30 percent in the past.
“There is clearly a slowdown in demand for watches from China, and Richemont is especially exposed to watches,” Mathew Menezes, an analyst at Avior Research, said by phone from Johannesburg.
“Even so, the slowdown is very broad-based and Richemont has positioned themselves uniquely in the high end- range, so I think their top line growth is doing O.K.”
The stock rose 3.6 percent to 70.60 Swiss francs at 9 a.m. in Zurich, bringing the gain in the past year to 30 percent.
Richemont shares touched a record 81.45 francs on January 18.
Richemont’s sales met the average analyst estimate.
The dollar was on average 6.9 percent stronger against the euro, Richemont’s reporting currency, during the fiscal year, boosting sales from the US and Asian countries whose currencies are linked to the dollar.
The owner of the Dunhill accessories brand said Swiss stock exchange rules required the announcement because of how much the results differ from last year’s.
Switzerland’s watch exports rose 0.6 percent in March as shipments to China dropped 31 percent, the fourth monthly decline, the Federation of the Swiss Watch Industry said today.
First-quarter export growth slowed to 2.4 percent after the 11 percent pace in 2012.
Hermes International SCA said yesterday that sales of timepieces declined 5.3 percent, excluding currency shifts, as the Chinese market slowed.
LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, said last week that retailers bought fewer watches than expected in the first quarter. - Bloomberg News