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ZURICH (Reuters) -Richemont (CFR.SW, CFRHF), the owner of Cartier jewellery, beat market expectations for third-quarter sales on Thursday, fuelling hopes that the luxury sector could be coming out of its recent downturn.
The Swiss company's sales jumped 10% year-on-year to 6.2 billion euros ($6.37 billion) for the three months to end-December, well ahead of analyst expectations for a 1% increase.
The results were seen as a positive sign for the high end of the luxury sector over the all-important holiday season.
Shares in Richemont, which also owns Swiss watch brands Piaget, IWC and Jaeger-LeCoultre, jumped over 14% in early trading on Thursday, while rival Swatch (UHR.SW) was seen up 3.9%.
Bernstein analyst Luca Solca described the results as "an encouraging sign and a confirmation...that (the previous quarter) may have been a trough".
Richemont had reported a 1% drop in sales during its second quarter after being hit by a downturn in Asia.
The company declined to comment on its future outlook.
Although there remained a "challenging" situation in China, where third-quarter sales fell 18%, this was more than compensated for by strong growth in other regions, Richemont said.
U.S. sales benefited from customers heading to the shops after the uncertainty of the presidential election while the strong dollar boosted tourist purchases in Europe. A weak yen also supported tourist purchases in Japan.
Richemont continued to spend on marketing and hosting events at its stores for high-end clients.
But Kepler Cheuvreux analyst Jon Cox was cautious, despite describing Richemont's performance as excellent.
"It's probably too early to say whether this is a new inflection point for the luxury goods sector but certainly very encouraging," said Cox.
Rival LVMH is due to report full-year results on Jan. 28, followed by Gucci-owner Kering and Birkin bag maker Hermes in February.
The industry is grappling with its lowest sales growth in years as shoppers, beaten down by economic uncertainty and high prices, have cut back on discretionary spending.
The gap between stronger and weaker players has been widening, with groups catering to the very high-end, like Hermes, outperforming those with a less wealthy customer base, such as Burberry.
(Reporting by John Revill, additional reporting by Mimosa Spencer, Editing by Friederike Heine and Sonia Cheema, Kirsten Donovan)