* Q3 sales grow 5 pct at constant currencies
* Ahead of forecast for flat outcome in poll
* Driven by strong jewellery, watches also recovering
* Shares indicated to rise 5 percent
(Adds share price indication, analyst comment)
By Silke Koltrowitz
ZURICH, Jan 12 Strong demand for jewellery and
improved watch sales in its own stores helped luxury goods group
Richemont beat forecasts with a 5 percent rise in sales in the
quarter to December, in a sign the watch industry may see a
recovery this year.
Swiss watchmakers have been grappling with weak demand in
their biggest markets, Hong Kong and the United States, and
Chinese tourist shoppers avoiding Europe for fear of extremist
attacks, so the improvement across all Richemont's major
regions is good news for the industry.
"The 10 percent growth in sales in the Asia Pacific region
reflected strong performances in mainland China and Korea,
mitigated by continued declines in Hong Kong and Macau," the
Geneva-based maker of IWC watches and Cartier jewellery said in
a statement on Thursday.
Richemont shares, down a fifth over the last two years, were
indicated 5 percent higher in pre-market trading. Shares of peer
Swatch Group were seen up 3.6 percent.
A 5 percent rise in sales at constant exchange rates is a
clear improvement over the 12 percent decline in the group's
first half, helped by an easier comparison base and beating
forecasts for flat growth in a Reuters poll.
At actual exchange rates, sales rose 6 percent to 3.09
billion euros ($3.28 billion), ahead of the 2.96 billion euro
The improvement was led by jewellery, but watch sales in the
group's own stores also picked up and the decline at multibrand
Europe saw 3 percent growth in constant currencies, helped
by robust sales in Britain.
Analysts highlighted the return to growth in Asia Pacific
driven by mainland China, a positive surprise in Europe,
flagship brand Cartier's strong performance and the improvement
in the high-margin watch retail business.
"2017 is going to be a very good year, and actually
something of a vintage after the slowdown of the last few
years," Kepler Cheuvreux analyst Jon Cox said.
Watch sales, which make up about half of Richemont's
revenue, started to decline in 2014 when political protests in
Hong Kong put an end to mainland Chinese shopping sprees.
Islamist attacks in Paris in November 2015 dealt another blow,
also hitting the generally more buoyant jewellery segment.
Two months ago - after controlling shareholder Johann Rupert
vented his anger about "unacceptable" performance - Richemont
reshuffled management, abolishing the CEO role to divide
responsibility among senior executives.
It also cut jobs, bought back inventory and closed shops.
Richemont cautioned full-year net profit, due on May 12, will
face a tough comparison.
($1 = 0.9427 euros)
(Editing by Michael Shields and Mark Potter)