LVMH Sales Meet Estimates as Duty-Free Offsets Fashion Woes

LVMH Moet Hennessy Louis Vuitton SA reported first-quarter sales in line with forecasts as gains at beauty retailer Sephora and DFS duty-free stores helped offset worse-than-expected fashion and leather goods growth.

Revenue climbed 6 percent to 6.95 billion euros ($9.1 billion) in the three months through March, Paris-based LVMH said today in an e-mailed statement, meeting the average of 13 estimates compiled by Bloomberg. Sales rose 7 percent excluding exchange-rate fluctuations and acquisitions, compared with 14 percent in the first quarter of last year and 8 percent in the final three months of 2012.

Sales at the company’s so-called selective retailing unit, which includes Sephora and DFS, advanced 17 percent on an organic basis as growth in Asian tourism fueled demand, LVMH said. Analysts were expecting a 12 percent rise, according to data compiled by Bloomberg.

Fashion and leather goods sales rose 3 percent on the same basis, short of analyst estimates for 5 percent growth. Italian rival Prada SpA this month reported an uneven start to the year, saying cold weather, the economic crisis in Europe and threats of nuclear strikes by North Korea had hurt demand.

“In an economic environment which remains uncertain in Europe, LVMH will continue to focus its efforts on developing its brands,” the world’s largest luxury goods company said in the statement, which was released after markets closed. It will also “maintain a strict control over costs,” it said.

Wine, Spirits

LVMH rose 0.3 percent to 131.25 euros in Paris trading today. The shares have dropped 5.4 percent this year, trailing a 1.9 percent gain in the benchmark CAC 40 Index.

Sales of wines and spirits rose 7 percent on an organic basis as “robust” demand for champagne in Asia made up for a “softer” performance in Europe, LVMH said.

Perfume and cosmetics sales gained 5 percent excluding currency moves and acquisitions, while watches and jewelry increased 2 percent, LVMH said.

(Updates with divisional breakdown from third paragraph.)
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