LVMH Moet Hennessy Louis Vuitton SE’s first-quarter sales soared, sending the stock to a record and pointing to the luxury sector’s recovery from a COVID-19 pandemic-induced slump.
Revenue at the fashion and leather goods unit surged 52 percent on an organic basis from a year earlier, the company said on Tuesday.
Analysts had expected a 30 percent increase.
Photo: Bloomberg
Gains in China drove the “eye-popping organic growth,” said Francesca DiPasquantonio, an analyst at Deutsche Bank AG.
In a further sign of buoyancy, LVMH’s performance even topped the same period in 2019.
The company’s stock rose as much as 3.2 percent in Paris trading, reaching a record 613.9 euros.
LVMH’s fashion and leather goods division has been the key driver throughout the crisis, benefiting from the growth of the Christian Dior and Louis Vuitton brands.
Revenue in Asia excluding Japan jumped 86 percent on an organic basis from a year earlier, followed by the US, where revenue grew by 23 percent.
However, sales in Europe were still down 9 percent compared with last year.
With catwalks having gone virtual for most of the past year, Dior and Vuitton have tried to entice customers by showcasing collections in sumptuous locales such as the Chateau de Versailles through Instagram and other platforms.
In a sign of how much Asia has emerged from the pandemic, Dior unveiled its disco-inspired women’s ready-to-wear fall collection in Shanghai this week in front of a large audience.
That was in stark contrast to the situation in LVMH’s home country of France, which is amid a third lockdown as it approaches 100,000 COVID-19 fatalities.
First-quarter revenue at the luxury giant rose 30 percent on an organic basis to just under 14 billion euros (US$16.75 billion).
Analysts had expected 12.7 billion euros.
Despite the gloom in Europe — where most fashion stores remained closed at the start of this month — the company is experiencing a surge in demand from local clients, LVMH chief financial officer Jean-Jacques Guiony said during a call with analysts.
“It’s a very good signal, [but] not sufficient to offset the fact that tourists are gone,” Guiony said.
Tiffany & Co, which officially became part of LVMH in January, has experienced a “strong start” to the year, he said.
LVMH has increased prices on some of its silver products, Guiony said, adding that he expects the overhaul at the US jeweler to “take years” — notably for the distribution, merchandising and marketing of the brand.
“We know there’s a lot to be done within the next years and we’ll do it,” he said.
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