by Joelle Diderich
From WWD.COM
LVMH Moët Hennessy Louis Vuitton said sales rose 17 percent in the first quarter to 5.25 billion euros, or $7.17 billion, beating analysts’ expectations despite the earthquake in Japan, which is seen denting demand for luxury goods.
“The group had an excellent start to the year, continuing the trends seen at the end of 2010,” it said. Dollar figures are converted from euros at average exchange rates for the periods to which they refer.
Stripping out currency fluctuations, the French luxury goods giant reported a 14 percent increase in revenue, reflecting positive momentum in the United States, Europe and Asia. LVMH did not provide a detailed comment on Japan, bar noting that its teams there had worked hard to effect a gradual return to normal after the earthquake in March.
Most business units logged double-digit revenue growth during the first quarter, except for perfumes and cosmetics, which saw sales rise 9 percent. Revenues were up 28 percent for watches and jewelry; 20 percent for wines and spirits; 17 percent for fashion and leather goods, and 20 percent for selective retailing.
The Louis Vuitton brand posted double-digit organic growth, accelerating its leadership of the fashion and leather goods division, which also includes labels like Marc Jacobs, Givenchy and Loewe. The division’s sales totaled 2.03 billion euros, or $2.77 billion, helped also by rapid revenue growth at Fendi and Donna Karan.
Production capacities for Vuitton have been expanded to keep up with the strong demand from both local clients and tourists, with the opening of a new workshop in the Drôme region of France, LVMH said.
In perfumes and cosmetics, Christian Dior had an “excellent” quarter thanks to sustained growth in its flagship product lines. During the period, it launched the Dior Addict lipstick and rolled out a new Miss Dior perfume advertising campaign fronted by Natalie Portman. LVMH did not say what impact, if any, the dismissal of its star couturier John Galliano had on cosmetics sales for the brand.
The results were published after market closing and LVMH officials were due to comment the figures in a conference call Tuesday. Shares in LVMH fell 2.01 percent Monday to close at 109.75 euros, or $147.65 at current exchange, on the Paris Bourse.
