LVMH MOËT HENNESSEY LOUIS VUITTON managed to dodge the effects of the Iraqi war and SARS in the first quarter, but not the dramatic shifts in international currency markets. A negative currency impact of about 11 percent hurt the performance of the luxury giant, which saw sales fall 5.2 percent to $3 billion in the three months ended March 31. A drop in global travel because of SARS and the war in Iraq have only impacted DFS, which saw sales drop 6 percent in March. But other regions fared well, with group sales up 10 percent in the U.S. and up 15 percent in Japan. In the U.S., LVMH’s sales of fashion and leather goods advanced 11 percent; Louis Vuitton, 28 percent, and Sephora, 17 percent. While all divisions experienced sales declines in net terms, only the watches and jewelry unit posted an organic sales drop. LVMH isn’t slated to disclose first-half profits until September…. GUCCI GROUP’s fourth-quarter profits climbed 1.7 percent to $102 million, or 99 cents a share, from $100.2 million, or 98 cents a share, boosted substantially by cost cuts and a lower tax burden. Revenue for the quarter rose 1.6 percent to $763.9 million from $751.7 million as double-digit growth at Yves Saint Laurent, YSL Beauté and brands like Bottega Veneta compensated for a 7 percent decrease in sales for the core Gucci brand. The Gucci division saw its sales drop 7 percent to $472.9 million from $508.7 million in 2001. The strong fourth quarter only partially counterbalanced a weaker first nine months for Gucci. In 2002, net profits dropped 27.4 percent to $242.4 million from $334 million. Revenues slid less than 1 percent to $2.71 billion from $2.75 billion…. A 22.4 percent spike in second-half revenue allowed BURBERRY GROUP PLC to breeze past its revenue target for the year ended March 31. Second-half revenues jumped ahead to $502.4 million from $411 million in the last six months of the prior year. This would place full-year sales at $932.1 million, 18.9 percent ahead of last year’s $783.4 million and nearly $40 million past the goal of $894.9 million established internally, although never released by the company, at the time of its initial public offering last summer. Burberry plans to report full-year results, including profit figures, on May 22…. Double-digit sales growth in accessories and markets like Asia and Italy lifted BULGARI’s first-quarter profit and revenue as the firm reiterated its concerns over the damaging impact of SARS. Net profit for the three months ended March 31 rose 26.7 percent to $13.2 million from $10.4 million in the year-ago period. Revenue rose 3 percent to $185.2 million, but Bulgari said growth would have been 9 percent at constant exchange rates…. Cerruti parent FIN.PART, which is seeking to recapitalize after auditors rejected its balance sheet, managed to swing into the black for the first quarter of the year. Net profit for the three months ended March 31 came to $736,765 compared with a loss a year earlier of $4.11 million. Sales rose 1.7 percent to $150.7 million from $148.2 million, but the company said it gained 7.1 percent, stripping out results from the Boggi store chain, which Fin.part sold in February. The firm said sales in April rose 29.7 percent to $33.1 million from $25.5 million…. HERMÈS INTERNATIONAL posted better-than-expected first-quarter results, but they were tempered by the detrimental effects of the strong euro and their prospects by concern over the disruptive effects of SARS on business in east Asia. Slammed by negative currency effects, sales at Hermès fell 3.2 percent to $336.4 million in the first quarter versus $347.6 million a year ago. However, analysts characterized it as a healthy performance since organic sales growth, eliminating the effect of currency fluctuation, amounted to 5.5 percent in the period — above their expectations. They praised strong sales of leather goods, up 10 percent in real terms; impressive figures in Japan, up 14.2 percent in local currency, and the rest of Asia, up 18.6 percent in local currencies…. MARZOTTO, owner of the Valentino and Hugo Boss fashion houses, said its sales for the quarter ended March 31 rose 3.4 percent to $593.9 million, aided by the consolidation of Valentino, which it bought in spring 2002. Clothing accounted for 86 percent of the total with textiles comprising the balance. Marzotto reiterated that Valentino is still on track to break even in 2004. In 2002, Valentino widened its operating loss to $13.8 million from a loss of $3 million the year before. Sales rose to $149.4 million from $144.7 million.
This story first appeared in the May 19, 2003 issue of WWD. Subscribe Today.