LVMH Sales Beat Forecasts

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LVMH Moët Hennessy Louis Vuitton SA, the world’s biggest luxury group, posted a 17-per-cent rise in first-quarter sales on Monday that beat analysts’ expectations despite the earthquake disaster in Japan, a key luxury market.

The owner of handbag maker Louis Vuitton, Hennessy cognac and Moët & Chandon champagne had sales of €5.25-billion ($7.2-billion) in the three months to March 31. The average estimate in a Reuters poll of nine analysts was €4.97-billion.

“All business groups recorded double-digit organic revenue growth in the quarter,” including Louis Vuitton, LVMH said in a statement that cited strong momentum in the United States, Europe and Asia.

The wines and spirits and watches and jewellery divisions “continued their strong recovery due to a confirmed return in client demand,” LVMH said.

At its annual general meeting on March 31, LVMH said it expected the impact of Japan’s woes on overall annual sales to be limited. Japan accounts for 9 per cent of group revenue.

The company did not give any further details in its statement on Monday. LVMH is due to hold a conference call on its sales on Tuesday.

British luxury competitor Burberry is due to give a second-half trading update on Tuesday, while L’Oreal, which competes with LVMH in perfumes and cosmetics, is expected to report first-quarter sales.

LVMH provided no forecasts, but said key priorities for the year will be brand development, cost controls and targeted investments.

In March, LVMH agreed to acquire Italian jeweller Bulgari for €3.7-billion in a deal analysts said sent a message to luxury peer Hermès SA that LVMH could make a friendly deal. LVMH owns more than 20 per cent of Hermès.

The Globe

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