PARIS-- LVMH Moët Hennessy Louis Vuitton reported Monday a jump
in its first-quarter sales, boosted by the weak euro, even as
underlying growth slowed from the previous quarter.
LVMH, home to brands including Louis Vuitton, Céline, Bulgari
and Moët et Chandon, said sales rose 16% to 8.3 billion euros ($8.8
billion) from EUR7.2 billion in the same period a year earlier.
Yet the company, which is viewed as a bellwether for the wider
luxury sector, received a significant boost from favorable currency
effects following the recent drop in the euro, as it sells over 70%
of its products outside of the Eurozone.
Stripping out the effects of foreign exchange swings,
acquisitions and disposals, sales growth in the first quarter
cooled to 3% on-year from a pace of 5% in the final quarter of
2014, marred by ongoing weakness in the company's wines and spirits
division and as business at the company's key fashion and leather
good's division also slowed.
After a long stretch of stellar growth, the biggest names in the
luxury industry have faced turbulence in recent times as companies
strive to keep up with changing consumer appetites. Over time, many
high-end shoppers particularly in China--have moved away from
easily recognizable name-brand accessories, seeking out less-well
known more prestigious labels.
At Louis Vuitton, LVMH's main brand, a new designer was brought
in, as the brand sought to refresh its image with a move toward
pricier yet more discretely branded accessories. The label rolled
out new lines of leather handbags retailing at more than a thousand
dollars apiece, steering focus away from its cheaper signature
monogrammed canvas bags.
In the first quarter, sales at the group's fashion and leather
goods business which makes up over a third of the company's revenue
increased by 13% to EUR3 billion, though a large part of the gain
owed to the weak euro.
Excluding currency effects, acquisitions and asset sales,
revenue in the division rose a meager 1% in the quarter.
LVMH said that underlying growth was affected by a tough
comparison with sales from the same period last year, notably in
Japan where consumers splurged at the beginning of 2014 in advance
of a tax hike.
The company's wines and spirits division continued to lag, with
organic sales sliding 1% on-year to EUR992 million.
Selective retailing which includes LVMH's duty-free store chain
DFS and cosmetics retailer Sephora reported sales up 5% on an
organic basis to EUR2.6 billion, though the company said DFS faced
a "complex situation in Asia."
Tuesday, LVMH will hold a conference call to comment on the
first-quarter sales figures.
Write to Nadya Masidlover at nadya.masidlover@wsj.com
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