Louis Vuitton surges to 10 year high
Published 13/04/2010 | 11:14
Luxury company LVMH surged to the highest price in almost 10 years in Paris trading after reporting first-quarter sales that beat analysts’ estimates.
Revenue for the three months ended March 31 increased 11pc from a year earlier to €4.47bn as demand grew for Louis Vuitton accessories and wholesalers replenished inventories after the global recession, LVMH said today in a statement.
That beat the €4.2bn average estimate of 15 analysts surveyed by Bloomberg.
“The performance looks very impressive and high quality, with final consumer demand picking up, and Europe and the US also rebounding strongly,” said Dennis Weber, an analyst at Evolution Securities. Restocking by wholesalers also boosted revenue, he said.
LVMH rose as much as €3.61, or 4.1pc, in Paris trading to €92.36, the highest price since August 18, 2000. The stock has increased 17pc this year and was up 2.3pc at 10:30am.
Sales of luxury goods suffered last year as retailers and distributors cut or suspended orders during the recession.
Consumer demand picked up in the fourth quarter, led by emerging markets, prompting Paris-based LVMH and rivals Hermes International SCA and PPR SA to forecast revenue growth this year.
LVMH’s “solid performance” came as wholesalers increased purchases, particularly of the company’s champagnes, watches and perfumes, said Thomas Chauvet, an analyst at Citi Investment Research in London.
Louis Vuitton, which makes clothing and handbags, also performed well, he said.
LVMH, which also makes Zenith watches and De Beers diamond rings, said it had a “strong” rebound in the US and Europe, and continued to perform well in Asia.
Revenue at the fashion and leather-goods unit, the company’s largest, climbed 8pc, led by a double-digit advance at Louis Vuitton, excluding currency changes.
Fendi had a “very good start” to the year because of sales growth at its own stores, LVMH said.
Watch and jewelry sales surged 33pc, buoyed by demand for the TAG Heuer Calibre 1887 watch movement product and Hublot’s new King Power collection, LVMH said.
Sales of wines and spirits, which include Krug and Veuve Cliquot champagnes, rose 18pc, reversing five consecutive quarters of decline as distributors built up their stocks, LVMH said.
Hennessy cognac did well in all regions and was boosted in Asia during Chinese New Year celebrations, LVMH said.
Perfume and cosmetics sales increased 11pc, LVMH said. Revenue at the selective retailing unit, which includes the Sephora cosmetics chain and DFS duty-free shops, rose 9pc, supported by a rebound in international travel.