By  on January 20, 2005

PARIS — Luxury giant LVMH Moët Hennessy Louis Vuitton posted a strong finish to a banner year, achieving a 2.2 percent increase in fourth-quarter sales to 3.87 billion euros, or $5.03 billion, a 7 percent rise in organic terms.

“We are optimistic, and despite a challenging currency environment, we see no signs of our main markets slowing down,” finance director Jean-Jacques Guiony told analysts during a conference call Wednesday. “Our markets are strong, and we expect them to remain so.”

LVMH, which reports full-year earnings in early March, estimated its 2004 increase in operating income at 10 percent and cited its objective for 2005 as a “tangible increase” in profits. The company also said it would continue to focus on star brands and improve profitability, as seen in its planned disposal of money-losing Christian Lacroix to America’s Falic Group.

For the full year, group sales rose 5.6 percent to 12.63 billion euros, or $15.71 billion, an 11 percent organic rise. All dollar figures are at the average exchange rate.

LVMH said all business groups logged an increase, excluding the impact of currency.

Headlining strong holiday sales and a record December was a “close to double-digit” performance by the cash cow Louis Vuitton brand in the fourth quarter. Star products included accessories in multicolored or trompe l’oeil versions of its famous monogram, handbags in blueberry colored Epi leather and a line of timepieces with pink faces and watchbands.

Analysts had been alarmed by flat sales of Vuitton in Japan last year, but LVMH assured that sales to Japanese clients, who are now traveling more, continue to grow at a mid-single-digit pace. The company also noted a December surge in Vuitton sales in Japan helped offset slight declines earlier in the year.

“We are very optimistic for Vuitton in 2005,” Guiony said, while declining to commit to precise sales target for the year.

Perfumes and cosmetics were a blot on the figures, with fourth-quarter sales down 2 percent to 657 million euros, or $852.2 million. The company blamed a reorganization of its U.S. distribution, which included a 20 percent cut in doors selling Christian Dior products.

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