PARIS — Hit by weak tourism, growth at LVMH Moët Hennessy Louis Vuitton stalled in the third quarter ended Sept. 30, with sales advancing 1.7 percent to $3 billion, versus $2.95 billion a year ago.

Still, the luxury giant stressed that its sales and profits continue to grow in the face of "general uncertainties surrounding the luxury goods market." What’s more, LVMH said growth in operating income, which advanced 19 percent in the first half, should accelerate in the second half.

"The priority given to organic growth and the actions implemented to improve profitability and increase cash flow are bearing fruit," the company said.

The results sent LVMH shares up 11.8 percent to close at $40.86 on the Paris Bourse. Many analysts continue to believe in LVMH’s restructuring story, and applauded the weighting of product launches and store openings to the second half.

French companies report sales and earnings separately. Net profits at LVMH fell 10.5 percent in the first half ending June 30 to $208.8 million from $233.1 million on a 2.3 percent rise in sales to $5.68 billion from $5.55 billion, as reported.

For the nine months ended Sept. 30, group sales inched up 2.2 percent to $8.76 billion from $8.57 billion a year ago. Dollar figures are converted from euros at the current exchange rate.

LVMH said all of its operations were growing at the end of September except DFS, which has been a drag on its momentum. Sales in the selective retail division, which includes DFS, Sephora and the Paris department stores La Samaritaine and Le Bon Marché, fell 7.5 percent in the quarter to $790 million. For the nine months ending Sept. 30, sales in the selective retailing division dipped 8.4 percent to $2.34 billion. LVMH held out hope for a "slow but steady recovery in tourism" and noted that sales at Sephora in the U.S. continue to grow more than 20 percent on a constant store basis. However, LVMH chairman Bernard Arnault has warned about the negative impact a war with Iraq would have on the company, especially tourist-reliant businesses like DFS.

Led by a "spectacular" performance of the Louis Vuitton brand, fashion and leather goods sales jumped 14.4 percent in the nine months to $3 billion. LVMH credited the launch of a Vuitton watch line, its Louis Vuitton Cup range and a giant new flagship in Tokyo for the gains.In perfumes and cosmetics, sales in the nine months grew 3.6 percent to $1.6 billion, with special mention given to the launch of Dior Addict in September.

Separately on Tuesday, Christian Dior SA, parent of LVMH and Christian Dior Couture, said its sales in the nine months grew 3 percent to $9.11 billion. Sales at Christian Dior Couture, which comprises the couture, ready-to-wear and accessories businesses, rocketed 49 percent in the third quarter. In the nine months, sales advanced 46 percent to $357.4 million. "The quarter was excellent," Dior president Sidney Toledano told WWD.

He noted that sales of women’s footwear almost tripled in September, versus a year ago, while sales of men’s wear doubled. Sales in the network of 138 Dior stores worldwide are currently running ahead more than 50 percent versus a year ago.

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