Caution is a word that we feel you, our readers and the luxury houses will become accustomed to.

Whilst financial results still seem to be impressive and with growth in all regions, the once burgeoning growth is not as high as it once was.

Richemont, the world’s second largest luxury group (behind our friends at LVMH) released their results this week, where the company has said that they are cautiously optimistic for the future despite the unstable economic environment.

Sales increased by 29 per cent to €8.867 million, whilst Richemont’s operating profit rose by 51 per cent to €2.040 million.

The Swiss luxury group said net profit rose 43 per cent to €1.54 billion. Both the net profit and sales exceeded analyst’s expectations.

Leading the way was the Group’s jewellery Maisons and its specialist watchmakers who have reported record sales and profits, despite the strength of the Swiss franc and the rising cost of precious metals and input costs.

Montblanc continued to grow and reported increased profits.

Richemont’s fashion and accessory Maisons also performedwell. “IT” high-end fashion website Net-a-Porter continued to enjoy sales growth above the Group average, while at the same time investing in structural expansion.

The Asia-Pacific region is the strongest for Richemont, now representing 42 per cent of the Group’s sales. Hong Kong and mainland China were the strongest when it came to sales in the Asia-Pacific.

Solid double-digit organic growth was registered across Europe. Sales were boosted by the growing number of travellers from other parts of the world. The Middle East and Africa, which accounted for 16 per cent of sales in the region, reported strong growth as well.

Richemont didn’t disclose financial figures for the Americas, with the region reporting robust double-digit growth reflecting the growing demand for jewellery and watches.

“Although sales in the month of April were 29 per cent above the comparative period, or 20 per cent at constant exchange rates, we are mindful of the unstable economic environment, particularly in the euro zone. The enduring appeal and the development potential of each of our Maisons lead us to focus our investment on the Group’s organic growth. Investments are primarily dedicated to the expansion and integration of the Maisons’ respective manufacturing facilities, as well as growth in their retail networks. Selective boutique openings will be focused in growth markets and in tourist destinations around the world. Our Maisons remain entrepreneurial and innovative businesses at heart. More than ever, we are convinced of their resilience and long-term prospects. We therefore look forward to the future with cautious optimism.” Johann Rupert, Richemont Executive Chairman and CEO said.

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Italian luxury house Salvatore Ferragamo has posted its first quarter 2012 results, with the company saying that it expects “significant” revenue growth in 2012 after reporting first-quarter earnings that beat analysts’ estimates.

Salvatore Ferragamo reported a rise in profits in the first quarter of 10.2 per cent to €15.5 million, due to growth in all geographic regions and increased sales of shoes, bags, leather accessories and perfume across the board.

Sales were up by 23.4 per cent to €259.6 million, which was mainly attributed to strong sales in the Asia-Pacific region where sales increased by 27.3 per cent.

China is still leading the way with sales up by 36 per cent and Japan up by 9.9 per cent.

Despite the financial woes still evident in parts of Europe, Ferragamo consumers stayed loyal, with sales going up by 27.8 per cent.

Sales in the US increased by 17.6 per cent, despite the temporary closure of its Fifth Avenue flagship store, due to renovations. The NY store is the group’s biggest source of turnover.

Looking at the product categories, sales of shoes climbed 26.2 per cent, while bags and leather accessories sales increased 24.3 per cent. Bags and shoes represent almost three quarters of total company sales. Perfume sales rose by 35.7 per cent, which was due to the launch of the new Ferragamo ladies’ fragrance Signorina.

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Standard & Poor’s Ratings Services has revised the outlook to positive from stable on France-based luxury goods LVMH Moet Hennessy.

When The MO Down read this notice on the Reuters website, we nearly spilled coffee down our couture as it contradicts some of the negative commentary that we’ve written about.

The outlook revision and affirmation follow LVMH’s reported strong operating performance in 2011 and reflect S&P’s anticipation that LVMH will likely achieve increasingly conservative financial metrics as of this year.

The ratings continue to be underpinned by S&P’s view of LVMH’s strong business risk profile, which since 2010 has benefited from the sharp rebound in the global luxury goods markets. LVMH has an unparalleled world-leading position with a flurry of prestigious luxury brands in their portfolio.

S&P believe that luxury goods will continue to benefit from favourable growth trends on the back of robust momentum in emerging markets.

LVMH has started 2012 with an exceptional performance, announcing a vigorous 25 per cent jump in sales in the first quarter.

S&P view LVMH’s financial policy as conservative.

The positive outlook reflects the possibility that they could upgrade LVMH if it continued to report robust sales growth, generated high free cash flow, and achieved adjusted FFO to net debt in excess of 60 per cent on a sustainable basis. S&P expect discretionary cash flow to exceed €1 billion in coming years.

S&P might consider revising the outlook to stable if LVMH were unable to maintain its ratio of adjusted FFO to net debt above 60 per cent.

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We might be starting to sound like a broken record here, but we are just making sure that you are all aware of the stellar performances put in by the luxury houses.

All is gold and sparkly in the luxury world right now and as expected and reported, we can’t see them slowing down anytime soon.

CLSA Asia-Pacific Markets analyst Aaron Fischer released a report “Dipped in Gold”, lamenting that resurgent market consumers are fuelling a strong growth in the global luxury goods market. Growth in the sector was double its long-term average last year, Fischer adds.

He has also predicted global growth of 10 per cent in 2012, slowing slightly from last year’s 14 per cent rise.

That should take emerging markets’ share of global luxury demand to 73 per cent by 2020, up from 50 per cent at present, Fischer predicts, with China playing a leading role.

If one casts their eye over the luxury house’s financial reports, you would see that the U.S, Europe and Asia are doing particularly well. Reuters has broken that down even further and reported that European fashion capitals (think Paris and Milan), New York and Hong Kong are leading the way, and shoppers from emerging markets account for over 50 per cent of luxury sales.

Chanel passed on 20 per cent price increases to consumers last year, with sales still staying bouyant and with LVMH and other luxury companies increasing their prices in Europe to make up for any windfall coming out of China due to high taxes, hasn’t harmed them at all.

Another interesting mention in the Reuters blog is that luxury brands are now benefiting from the growing sophistication of consumers who aren’t content with knock-offs anymore. Between 2008 and 2011, the majority of Chinese consumers interested in buying fakes (oh the thought!) fell by more than half to just 15 per cent, a McKinsey survey found.

The MO Down has kept you at the forefront when it comes to luxury IPO’s. Fischer picks Prada amongst his top picks, as well as Chinese luxury brands Belle, Chow Tai Fook and Lifestyle department store.

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