LVMH reports Q1 sales; revenue advanced 4% to €7.21 billion; Wine & spirits, Cognac, Belvedere vodka down on sales.
Analysts predicted € 7.4 billion. Sales climbed 6%, excluding acquisitions, disposals and currency swings. Louis Vuitton sales to domestic consumers in Europe slightly improved year-on-year.
Wines and spirits sales fell 3% on an organic basis. The trend is explained by the performance of cognac and Belvedere vodka in China, linked to current destocking by retailers.
LVMH is introducing more expensive products at handbag maker Louis Vuitton, while increasing investment at some of its smaller fashion brands amid competition from lower-priced labels such as Michael Kors and Coach. Prada last week forecasted slowing same-store sales growth in the financial year through January 2015, citing a strong euro and weakening demand in China.
Sales of fashion and leather goods climbed 9% on an organic basis, compared with a 3% gain in Q1 of 2013. The division’s total sales advanced 11%, boosted by last year’s acquisition of Italian cashmere clothier Loro Piana and British shoe brand Nicholas Kirkwood.
LVMH doesn’t report earnings at the end of Q1. The shares rose 1% last week to € 136.45 in Paris, giving the company a market value of € 69.3 billion.
It is estimated that the luxury market will probably grow 5-6% annually though 2017
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