Compagnie Financière Richemont SA, the world's second-largest luxury goods group, on Thursday reported an 18 percent rise in net profits to 1.57 billion euros, or $2.22 billion, on a 10 percent increase in sales to 5.3 billion euros, or $7.51 billion, for the year ending March 31.

The increases were driven by strong growth in Richemont's jewelry and specialist watch businesses, which include Cartier, IWC, Piaget, Baume & Mercier and Panerai. Chloé, its main women's wear business, saw relatively flat sales, however.

The results compare with profits of 1.33 billion euros, or $1.7 billion, on sales of 4.83 billion euros, or $6.19 billion, the previous year. All currency exchanges have been made at average exchange rates for the respective periods.

Johann Rupert, Richemont's chairman, expressed caution over the year, but was optimistic the group could weather the economic downturn. "Despite turbulent times, sales during the first quarter of 2008 showed growth of 11 percent at actual exchange rates, and that pattern has been repeated in the month of April with sales growth of 16 percent at actual exchange rates and 24 percent in local currency terms," he said.

"Over the first 20 years of its existence, we have positioned Richemont well to face the challenges of the global economy. The group has no net debt and a strong balance sheet, and we have invested our surplus funds prudently," he said.

For complete coverage, see Friday's issue of WWD.