LVMH sales soar as shoppers return to luxury
LVMH sales surged 15 per cent in the latest quarter to €9.88 billion (US$10.477 billion).
That was nearly €400 million more than analysts had been expecting, with the result driven across all of the luxury group’s business units.
Fashion and leather goods, which account for more than half the company’s turnover, rose 15 per cent during the quarter. That compares with static growth the same quarter last year. Fendi and Louis Vuitton were singled out by analysts as strong performers, with Celine, Kenzo, Loewe and Berluti also showing progress.
LVMH’s leather and fashion brands also include Dior, Emilio Pucci, Fendi, Givenchy, Louis Vuitton, Marc Jacobs, Moynat, Rimowa and Thomas Pink.
‘Selective retailing’, the group’s second-largest division, had been dragged down by DFS in prior quarters, offsetting a strong performance by Sephora cosmetics chain, observed Deborah Aitken, an analyst with Bloomberg Intelligence. But the latest quarter it showed improvement of 11 per cent. Sephora continued to gain market share globally and recorded double-digit revenue and profit growth for the quarter.
“This could be an important turnaround,” said Aitken.
Liquor – including brands such as Cape Mentelle, Chandon, Cloudy Bay, Dom Pérignon, Glenmorangie, Hennessy, Krug, Moët & Chandon and Veuve Clicquot – was the second best performing sector, up 13 per cent organically. Hennessy was a star performer.
Sales of watches and jewellery also rebounded, rising 11 per cent. Bulgari continued to gain market share and Tag Heuer successfully launched its new Connected Modular 45 watch.
And the perfume and cosmetics business grew sales by 12 per cent.
Fung Global Retail observed that Parfums Christian Dior reported good growth and Guerlain launched a new women’s fragrance called Mon Guerlain during the quarter. Parfums Givenchy benefited from the success of lipstick lines, which saw rapid development in Asia. In addition, the Kat Von D brand launched exclusively in January 2017 at Sephora in France.
While the company was clearly pleased with its results it did warn shareholders to keep their expectations modest, pointing out the growth had come against a 2016 quarter when the industry was struggling with Paris terror attacks. It said such levels of growth should not be expected for the full year.
LVMH shares rose to a record in Paris after the results were announced.
The LVMH figures will set the standard for a raft of luxury retail earnings due to be released in the coming days. Prada reports results today and Kering, parent of Gucci, on April 25.