LVMH First-Quarter Sales Buoyed by U.S. Demand for Luxury

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LVMH Moet Hennessy Louis Vuitton CEO Bernard Arnault
Bernard Arnault, chairman and chief executive officer of LVMH Moet Hennessy Louis Vuitton. Photographer: Balint Porneczi/Bloomberg

LVMH Moet Hennessy Louis Vuitton SE, the world’s largest luxury-goods maker, reported a 16 percent increase in first-quarter sales as the weak euro and growth in the Americas helped compensate for a slowdown in China.

Revenue advanced to 8.32 billion euros ($8.8 billion), LVMH said in a statement Monday after markets closed. Analysts predicted 8.13 billion euros, based on the median of estimates compiled by Bloomberg. Excluding acquisitions, disposals and currency swings, revenue climbed 3 percent.

Renewed demand for Louis Vuitton handbags and a weak euro have helped lift LVMH shares about 30 percent this year, even as China’s anti-graft campaign weighs on sales in the country. The Paris-based company should continue to trade at a premium to its European luxury peers as sales of cognac and watches improve in the second half of 2015, Sanford C. Bernstein said.

LVMH “is firing on more cylinders,” said Luca Solca, an analyst at Exane BNP Paribas, citing jewelry brand Bulgari, which recently introduced a new watch for women. “The read-across on the sector is not too significant as most of these elements come from company-specific activity.”

The shares fell 0.4 percent to 171.85 euros at 9:09 a.m. in Paris Tuesday, giving LVMH a market value of about 87 billion euros. They reached a record 175.40 euros March 16.

Quarterly sales of watches and jewelry rose 7 percent on an organic basis, surpassing analysts’ estimates, while wines and spirits revenue fell less than analysts predicted as the U.S. drove an increase in Hennessy cognac volume. The fashion and leather goods division, LVMH’s largest, matched estimates for 1 percent growth.

“This is a respectable outcome considering the tough basis of comparison,” said Thomas Chauvet, an analyst at Citigroup in London, who reiterated a buy recommendation on the stock.

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