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PARIS — Bucking strong currency headwinds and dodging economic uncertainty, LVMH Moët Hennessy Louis Vuitton kept up its double-digit momentum in the first quarter as sales jumped 12 percent at constant exchange to 4 billion euros, or $5.99 billion at average exchange rates.
Still, reflecting the negative impact of a strong euro versus the dollar and yen, the increase in reported sales at the French luxury giant stood at 5 percent from 3.8 billion euros, or $5.69 billion.
The wines and spirits business lacked fizz, which LVMH blamed on the adverse timing of price increases. Sales in that division fell 7 percent to 640 million euros, or $958.6 million, a 1 percent uptick in organic terms.
But the core fashion and leather goods group charged ahead, logging a 14 percent organic gain to 1.45 billion euros, or $2.16 billion.
Louis Vuitton posted double-digit organic growth in the three months ended March 31, with “particularly significant” increases in the U.S., Europe and Asia, the company said. It also noted leather goods designed by Marc Jacobs in collaboration with artist Richard Prince sparked “remarkable enthusiasm” from its clients and that its other brands recorded an “excellent” quarter.
A conference call is scheduled for today to discuss the figures.
While acknowledging a “challenging monetary environment and an uncertain economic climate,” LVMH confirmed its objective of “tangible” growth in results for 2008 and said boosting the market share and profitability of its star brands would be among its top priorities.
In perfumes and cosmetics, sales grew 13 percent in organic terms to 717 million euros, or $1.07 billion, with Europe and Asia driving the growth. By brand, Dior showed “great momentum” with its perennially popular J’Adore fragrance and the new Midnight Poison scent, along with Addict High Shine lipstick and Capture skin creams.
While its smallest division in terms of sales, watches and jewelry posted the biggest organic revenue gains, up 19 percent to 211 million euros, or $316 million. Key styles included Tag Heuer’s Grand Carrera range, Zenith’s Chronomaster Grande Date and Dior’s Christal range. Innovations at all three brands also led to “large increases” in orders at the recent Basel watch fair, LVMH noted.
Sales in selective retailing leaped 15 percent at constant exchange to 1.01 billion euros, or $1.51 billion, with DFS’ fortunes boosted by surging Asian tourism and an uptick in Japanese spending abroad supported by a stronger yen.
Meanwhile, Sephora recorded strong growth on a comp-store basis in all markets and increased its market share, the company said.