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LVMH First-Quarter Sales Top Estimates, Defying Slowdown

A pedestrian passes the window display of a Louis Vuitton store, operated by LVMH Moet Hennessy Louis Vuitton SA, in Dublin. Photographer: Aidan Crawley/Bloomberg
A pedestrian passes the window display of a Louis Vuitton store, operated by LVMH Moet Hennessy Louis Vuitton SA, in Dublin. Photographer: Aidan Crawley/Bloomberg

April 18 (Bloomberg) -- LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, reported first-quarter sales that beat analysts’ estimates as demand for its products accelerated, defying an “uncertain” European economy.

Revenue climbed 25 percent to 6.58 billion euros ($8.6 billion), the Paris-based company said today in a statement. The average of 11 analysts’ estimates compiled by Bloomberg was 6.39 billion euros. Sales advanced 14 percent excluding currency shifts and acquisitions, with growth accelerating from 12 percent in the last three months of 2011.

Demand for LVMH’s products is increasing even as China’s economy slows and Europe’s debt crisis weighs on consumer spending. Revenue growth was driven by an 18 percent increase at the selective-retailing unit, which includes DFS duty-free stores and the Sephora cosmetics chain. Sales climbed at least 10 percent in all regions.

“This is a good start to the year,” Rogerio Fujimori, an analyst at Credit Suisse, wrote in a note. “LVMH offers the most balanced and diversified portfolio in the sector thanks to the ownership of several leading brands with global scalability to emerging markets and attractive profitability.”

LVMH fell 3.1 percent to 126.50 euros at 4:49 p.m. in Paris trading, paring this year’s gain to 16 percent.

Not Pessimistic

Sales climbed 17 percent in Asia, 16 percent in the U.S., 12 percent in Japan and 10 percent in Europe, excluding currency shifts and acquisitions, LVMH said on its website.

Asian tourists are shifting some purchases to Europe, denting demand at home, Finance Director Jean-Jacques Guiony said on a conference call. Europe “remains uncertain,” LVMH said. Yet, while the environment is a bit more challenging, “there is no reason to be pessimistic,” Guiony said.

Burberry Group Plc, the U.K.’s largest luxury-goods maker, yesterday reported a 15 percent gain in so-called organic fourth-quarter sales, decelerating from the previous quarter as revenue was held back by adjustments to its wholesale business.

Burberry, based in London, said like-for-like sales growth in China slowed to about 20 percent from more than 30 percent in the last three months of 2011, while retail sales in Europe were “modestly better” than the previous quarter.

LVMH said it “will maintain a strict control over costs” given the situation in Europe. Global sales of luxury goods may increase 10 percent in 2012, about half last year’s pace, according to estimates by CA Cheuvreux analyst Thomas Mesmin.

Vuitton in Rome

At the selective-retailing unit, DFS shops at airports and other duty-free locations benefited from growth in Asian tourism, particularly in Hong Kong and Macau. Sephora posted “robust” comparable store growth and won market share in key regions, LVMH said. Online sales also grew rapidly, it said, adding that Sephora will open soon in Brazil and Scandinavia.

Sales of fashion and leather goods, LVMH’s largest source of revenue, advanced 12 percent, aided by a 3 percent price hike at the Louis Vuitton brand in Europe. Fendi had “a good start” to the year, while Celine recorded “strong” growth, LVMH said.

Watch and jewelry sales rose 17 percent. All brands posted “good momentum” in Europe and expansion of the store network continued in Asia, LVMH said. With an increase in retail orders compared with last year, 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, it said.

Perfume and cosmetics sales rose 9 percent.

To contact the reporter on this story: Andrew Roberts in Paris at

To contact the editor responsible for this story: Sara Marley at

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