PARIS — LVMH Moët Hennessy Louis Vuitton is expected to show “superior resilience” to the economic downturn when it reports first-quarter sales next week, according to an analyst’s report.
HSBC luxury analyst Antoine Belge forecast sales would be up 2 percent to 4.07 billion euros, or $5.32 billion at average exchange rates, reflecting that fashion and leather goods, particularly the cash-cow Louis Vuitton brand, “should have held up well.”
Champagne and watches, with expected like-for-like declines above 20 percent, are likely to drag down the overall group performance, yet it should compare favorably with most watch and jewelry players, Belge noted. Organic sales, stripping out the impact of currency and the consolidation of the newly acquired watch brand Hublot, should decline 5 percent.
HSBC maintains a neutral rating on the stock, and notes the key risk for LVMH and other luxury players is if Continental Europe and Asia slow significantly on the back of rising unemployment.
The investment firm’s “median scenario” for luxury is a “V-shaped” recovery from the fourth quarter of 2009, leading to a rebound in earnings in 2010.