November 9, 2018 / 6:47 AM / 6 days ago

UPDATE 1-Richemont highlights volatile consumer demand as net profit falls

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ZURICH, Nov 9 (Reuters) - Luxury goods group Richemont said economic and geopolitical uncertainties were weighing on customer sentiment after underlying net profit fell in the six months to Sept. 30 and sales growth slowed towards the end of the period.

"Amidst growing volatility in consumer demand, partly attributable to an uncertain economic and geopolitical environment, we maintain confidence in our ability to realise our long term ambitions," the maker of IWC watches and Cartier jewellery said in a statement on Friday.

Swiss luxury watchmakers have seen sales growth slow recently, with exports to their biggest markets, Hong Kong and the United States, turning negative in September.

Investors have been fretting over a slowdown in Chinese spending amid a trade war with the U.S., but luxury firms like Hermes and Kering have reported solid sales growth and played down fears of cooling demand in China.

Richemont said group sales grew 8 percent at constant currency, down from 10 percent during the five-month period. This was excluding the contribution of recently acquired online distributors Yoox Net-a-Porter (YNAP) and Watchfinder.

The world's second largest luxury group said sales in Asia Pacific, its biggest market, rose 14 percent with high single-digit sales growth in mainland China and double-digit increases in Hong Kong, Macau and Korea.

But sales in Europe increased only 1 percent, reflecting "mixed performances in terms of markets, product lines and channels as well as the disposal of Lancel", the Geneva-based company said.

Profit for the period more than doubled to 2.25 billion euros ($2.55 billion), primarily due to a 1.38 billion euros post-tax non-cash gain on the revaluation of existing shares following the full acquisition of Yoox Net-a-Porter.

Excluding the one-off gain, net profit slid to 875 million euros, from 974 million euros a year earlier. ($1 = 0.8813 euros) (Reporting by Silke Koltrowitz, editing by John Revill)

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