UPDATE 1-Cartier owner Richemont beats Q4 sales forecast despite Middle East hit

The company said constant-currency sales there fell by 3% in the quarter, below the 20% growth ⁠rate ​seen a quarter earlier. "Looking ⁠ahead, uncertainty is likely to persist, not least in relation to developments in the Middle East," Richemont Chairman Johann Rupert said.

Cartier-owner Richemont reported ​better than expected fourth-quarter revenue on Friday, as ​a fall in Middle East ‌sales was ​offset by strong demand in other regions like the United States and Asia. The Swiss-based owner of a host of luxury brands, including watchmakers ‌IWC, Jaeger-LeCoultre and Piaget, saw sales rise 13% in constant currencies to €5.40 billion ($6.27 billion) in the three months to the end of March.

The figure beat analyst forecasts for €5.30 billion in a consensus of analysts gathered by ‌Visible Alpha. Without excluding currency swings, quarterly sales were up 4%%, Richemont said, a smaller increase ‌mainly due to the euro's strength versus other currencies. Richemont generates a higher portion of its sales, around 8%, in the Middle East than most industry peers. The company said constant-currency sales there fell by 3% in the quarter, below the 20% growth ⁠rate ​seen a quarter earlier.

"Looking ⁠ahead, uncertainty is likely to persist, not least in relation to developments in the Middle East," Richemont Chairman Johann Rupert said. Luxury ⁠investors are increasingly worried that 2026 won't be the year of the sector's recovery after close to three years ​of weak sales led by lacklustre demand in China, now exacerbated by the impact of the Iran ⁠war. Richemont's quarterly Asian sales, however, were up 14%, beating market expectations, with the group saying demand was particularly strong in Hong ⁠Kong ​and South Korea. Japan also saw strong growth of 28% when adjusted for currency swings. The conflict in the Middle East - until recently the sector's most profitable and fastest-growing region - is clouding ⁠the outlook for companies from Hermes to LVMH which have had a sluggish start to the year, sending ⁠their shares down 24% and ⁠27% respectively since the start of the year.

Shares in Richemont, which have been cushioned by robust demand for its high-end jewellery despite the wider downturn, have shed ‌9% so ‌far this year. ($1 = 0.8610 euros)