LVMH First Quarter sales beat expectations, defying slowdown
Revenue at LVMH, world’s largest luxury group, climbed 25 percent to 6.58 billion, sales growing by14 percent excluding currency shifts and acquisitions, up from 12 percent in the last three months of 2011.
Demand for LVMH’s products is rising even as China’s economy slows and Europe’s debt crisis weighs on consumer spending. The Sephora cosmetics chain and DFS duty-free stores led the gain as sales at the selective retailing unit surged 18 percent on a so-called organic basis.
LVMH “continued its excellent momentum at the start of the year with particularly fast growth in Asia and in the United States and good progress in Europe despite the contrasting environment,” the company said in the statement. Europe“remains uncertain.”
LVMH sales grew “more than” 10 percent in all regions except Europe, where they advanced “nearly” 10 percent, a spokesman told Bloomberg News. At the selective retail division, DFS shops at airports and other duty-free locations benefited from rapid growth in Asian tourism, particularly in Hong Kong and Macau, while Sephora posted “robust”comparable store growth and won market share in key regions, LVMH said. Online sales also registered “rapid” growth. Sephora will open soon in Brazil and Scandinavia, according to the statement.
Fashion and leather goods, LVMH’s largest source of revenue, advanced 12 percent, led by the Louis Vuitton brand.Watch and jewelry sales grew 17 percent. With an increase in retail orders compared to last year, the new timepieces presented at the Basel watch fair were very well received, according to the statement. Bulgari had “an excellent start” to the year, LVMH said.
Revenue from wines and spirits climbed 16 percent, buoyed by price increases and a 9 percent gain in volume at Hennessy cognac, LVMH said. Champagne volume grew 5 percent, fueled by prestige brands.