DOW JONES--Shares of $RMS (+2.19%) fell 11 percent after the luxury group’s sales in China disappointed investors.
To get an indication of when this important market might recover, keep an eye on pork prices.
That’s the advice from Hermès CEO Axel Dumas. He said the commodity, which is currently very cheap, is one of two things he monitors to gauge the health of Chinese consumers—along with real estate.
“Pork is eaten, especially at banquets and in restaurants...so it’s a good indicator of the desire to, you know, celebrate,” Dumas said. “I’m not saying that all our customers react to the price of pork, but I’m waiting for the recovery, which will be a good indicator of optimism.”
Hermès reported a 6.7 percent increase in sales for the second quarter today. However, sales in the Asia-Pacific region—which excludes Japan but includes China—rose by only 2.5 percent, disappointing analysts.
The timing of a recovery in China is a key question for the luxury goods industry, which has relied on spending by Chinese customers both at home and abroad in recent decades.
This article is part of live coverage by The Wall Street Journal.
