Paris—If there’s a company that’s rightfully bullish on luxurygoods sales, it’s LVMH, which today reported 18% increase in its third quarter earrings to 6.01 billion euros (about $8.23 billion)
Excluding currency swings and acquisitions, the sales increase beat analysts’ estimates for 5.85 billion euros for the quarter.
Noting a continuation of trends begun earlier this year, LVMH said “the momentum continued in Asia, Europe and the United States, while Japan returned to growth over the period. Louis Vuitton achieved exceptional progress around the world.”
For the first nine months of the year, LVMH said its earnings rose 15% to 16.3 billion euros with organic growth also rising 15% after the currency impact was compensated by its acquisition of Bulgari in June.
Results ‘Nourish Our Confidence for the Future’
“In the current environment, most people are looking for reasons to be worried rather than to be optimistic,” Jean-Jacques Guiony, LVMH’s finance director, told investors and press on a conference call today. “We are very proud obviously to disappoint pessimistics as our businesses, by and large, continue to operate in the same environment as they have since the beginning of the year.”
The positive news from LVMH comes just a day after Bain & Co. released its luxurygoods report for Altagamma Foundation, which expects a 10% gain in luxurygood sales worldwide. While some analysts predict a weakened in 2012 due especially to fears about Europe’s sovereign debt crisis, Guiony said that despite some weakness in sales in Southern Europe, October sales have been in line with the first nine months of the year.
“Our future view is as good as yesterday’s sales,” Guiony told Bloomberg News. “Yet the current strengths of, more or less, all our businesses and all geographies nourishes our confidence for the future and our ability to make further advances on the luxury market.”
By division, LVMH said its fashion and leathergoods division posted a 15% increase in the first nine months, lead by a double-digit increase at Louis Vuitton, its largest flagship brand. “All product categories contributed to the exceptional attraction of the brand throughout the world,” LVMH noted. Leathergoods continue to have strong demand and “classical products” performed well.
Jewelry, Watch Sales, Including Bulgari, Surge
“Fendi and Donna Karan made strong progress. Celine maintained the remarkable performance experienced since the start of the year, driven by the critical acclaim accorded to its new leather goods and ready-to-wear collections.”
LVMH’s watches and jewelry business, which was already posting gains, has posted 26% increase over the first nine months this year. The third quarter was marked by the successful public offer for the outstanding minority shares in Bulgari, which “is performing well across all product categories.” TAG Heuer enhanced its women’s watch assortment with a new jewelry extension to its Formula 1 line and has expanded its presence inAsia. Hublot continues the successful roll-out of the Classic Fusion collection. “Driven by the excellent progress of its El Primero and Captain ranges, Zenith continues to demonstrate the strong appeal of its high quality chronographs. The other jewelry brands, Chaumet, Fred and De Beers continued their positive momentum through their own store network,” the company stated.
The Selective Retailing division, which includes DFS, posted a 19% increase over the first nine months. DFS continued to benefit from the expansion of Asian tourism which was particularly strong in Hong Kong andMacao. Sephora recorded steady revenue progress and increased market share in all its regions.
Guiony reiterated LVMH’s stake in Hermès remains about 21.4% which it declared in July when the company said it had no intentions of a hostile takeover of the French brand.