Sales for the world’s largest luxurygoods company rose to 5.11 billion euros (about $7.2 billion) from 4.14 billion euros a year earlier as all divisions posted double-digit growth. The figure beat analysts’ expectations of 4.83 billion euros.
LVMH said the performance “confirmed its confidence for 2010” as the company entering the all important end-of-year period which accounts for a large proportion of annual sales. Luxurygoods executives have been cautious in calling a return to growth in the sector after the economic crisis abruptly ended years of fast growth.
Sales were also stronger across every division, LVMH stated. The wine and spirits division, closely watched this quarter for signs consumer demand has improved, posted a 24% rise in sales to 846 million euros. The division, which sells Veuve Clicquot champagne, suffered during the financial crisis but recently rebounded sharply as retailers began restocking their stores. This quarter shows end demand from consumers has also returned, the company noted.
New Leathergoods Collection Planned for Q4
Sales in the fashion and leathergoods division, which includes the Louis Vuitton brand, grew 26% to 1.95 billion euros. The company also plans to launch a new leathergoods in the fourth quarter, and reported that “strong momentum” has returned to the Fendi and Donna Karan brands since the beginning of the year.
Watch and jewelry revenue advanced 30%. TAG Heuer continued its successful worldwide expansion and benefited from the new models launched in conjunction with its 150th anniversary. Hublot gained market share due to the excellent performance of its Big Bang and King Power lines. The jewelry brands Chaumet, Fred and De Beers also enjoyed strong growth.
Revenue at the selective-retailing unit, which includes Sephora and DFS, rose 24%
At LVMH “all divisions did better than we expected,” said Melanie Flouquet, an analyst at JPMorgan Cazenove in Paris. Watches and LVMH’s retail unit outperformed the most, she said. “It is not just about Asia, but about global luxury demand,” led by the company’s star brands including Louis Vuitton and Tag Heuer, Citigroup said.
LVMH shares have risen 23% over the past six months, largely outpacing the Paris CAC-40 index, which declined 6% over the same period.