LVMH Shares Surge as Louis Vuitton Maker Beats Asian Bluesby
Luxury-goods maker's shares rise 6.5% in Paris trading
Fashion and leather-goods lead fourth-quarter performance
LVMH shares gained the most in a year after results beat estimates on demand for Louis Vuitton bags in Japan and Europe, providing some relief for a beleaguered luxury-goods industry.
The stock rose 6.5 percent to 154.65 euros at 10:43 a.m. in Paris, and earlier surged as much as 7.4 percent, the biggest intraday gain since Feb. 4, 2015. Before today, it had declined 15 percent in six months, weighed down by slowing demand in Asia.
A better-than-expected fourth-quarter performance in fashion and leather-goods provided a highlight for the world’s largest maker of luxury products, which is benefiting from a broad spread of goods covering Celine dresses, Moet and Chandon champagne and Christian Dior perfumes. That compensated for a slowdown in the watches & jewelry unit, where sales were hurt by a slump in Asian demand that caused Swiss rival Swatch Group AG to report earnings that missed estimates.
“When the environment gets tough, the highest-quality companies like LVMH tend to stand out,” Rogerio Fujimori, an analyst at RBC Capital Markets, said in a note. “In the present environment, LVMH shares deserve to re-rate versus peers given its relative defensive growth profile.”
On a conference call, LVMH Chief Executive Officer Bernard Arnault expressed confidence that the Paris-based company can continue to outperform its luxury sector peers in the upcoming year, despite an “uncertain” business climate.
*Profit advanced 16 percent last year to 6.61 billion euros
*4Q organic revenue increased 5 percent, topping the 3.9 percent estimate
*Fashion and leather-goods sales rose 3 percent, beating expectations
*Watches and jewelry sales up 3 percent, missing the 8 percent estimate
*Sales in Japan surged 12 percent, and were up 6 percent in Europe