Jan 18, 2010
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Richemont third quarter sales top forecasts

Jan 18, 2010

ZURICH (Reuters) - Richemont (CFR.VX), the group behind Cartier watches, posted forecast-beating sales over the Christmas period, adding to signs shoppers are splashing out again on luxury goods.

Alange-Soehne, a Richemont brand - Photo: www.alange-soehne.com

Richemont's sales rose 2 percent in the third quarter at actual exchange rates, or 7 percent at constant exchange rates, to 1.585 billion euros ($2.29 billion), easily beating the average estimate in a Reuters poll.

"The improvement in trading is welcome in the context of a generally difficult economic environment, although the figures should be viewed against the weak comparative figures of the same period in 2008," the world's second largest luxury goods group said on Monday 18 January.

Richemont's comments come just days after Tiffany & Co (TIF.N), said its profits should beat expectations after a rise in holiday sales.

Recent Swiss watch export data has also signalled the beleaguered sector may be emerging from its sharpest drop in demand in some 20 years.

The luxury goods industry has been grappling with weak consumer sentiment and high-end watches and jewellery have been particularly hard hit as the wealthy have spent less on pricey treats.

Richemont, which is controlled by South Africa's Rupert family, trades at 19 times expected 2011 earnings, while world-leader LVMH (LVMH.PA), trades at 19.4 times 2010 earnings.

Analysts had expected Richemont, whose watch brands include top-end names such as Piaget, Vacheron Constantin and Jaeger-LeCoultre to post sales of 1.475 billion euros in the third quarter.

(Reporting by Katie Reid; Editing by Hans Peters)

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