PARIS — LVMH Moët Hennessy Louis Vuitton got off to a flying start in 2019, boosted by the “remarkable” performance of its star brand Louis Vuitton, signaling that the luxury sector is maintaining its momentum despite concerns over a slowdown in China, which accounts for one-third of sales of high-end goods worldwide.
The group’s overall revenues were up 16 percent in the three months ended March 31 to 12.54 billion euros, helped by a stronger-than-expected performance in its key fashion and leather goods division. Sales were up 11 percent on an organic basis.
“The trends observed in 2018 continued throughout the first quarter. All geographic regions are experiencing good growth,” the company said in a statement published after the stock market close.
The luxury giant said sales in the FLG division, which includes Fendi, Dior and Givenchy, jumped 15 percent on a like-for-like basis to 5.11 billion euros during the quarter, sharply beating consensus estimations of around 12 percent organic growth, despite tough comparables.
The division had posted organic growth of 16 percent in the same period a year ago, and recorded a 17 percent rise in like-for-like sales in the fourth quarter.
In the first three months of the year, Vuitton posted strong growth across all of its businesses, helping it achieve an “exceptional” performance, LVMH reported. The brand reopened boutiques in Florence, London, Monaco and Shanghai, and inaugurated a new leather goods workshop in France.
Meanwhile, Christian Dior Couture performed “exceptionally well” across all its product categories and regions, the group said. The Victoria & Albert museum in London has extended the closing date of its “Christian Dior: Designer of Dreams” exhibition to Sept. 1 from July 14 due to popular demand.
LVMH did not provide any information about sales at Celine, merely noting that creative director Hedi Slimane’s first men’s and women’s ready-to-wear collections had arrived in stores. The brand kicked off a major worldwide retail push with the opening on Feb. 18 of its redesigned flagship on Madison Avenue in New York.
The group indicated that Fendi, Loewe and Berluti were “growing fast,” while Loro Piana performed well.
The fashion and leather goods division outperformed all other segments. Wines and spirits were up 9 percent, with volumes remaining stable for Champagne and rising 11 percent for Hennessy cognac. Perfumes and cosmetics also recorded organic growth of 9 percent, fueled by Dior, Guerlain, Givenchy and Rihanna’s Fenty Beauty.
Selective retailing was up 8 percent as Sephora recorded strong revenue growth and gained market share, with the opening of a flagship in New York City’s new Hudson Yards development. Travel retailer DFS grew at a steady pace, with its Galleria stores in Hong Kong and Macau performing particularly well.
Watches and jewelry grew by a lower-than-expected 4 percent on an organic basis, driven by the jewelry segment headed by Bulgari.
LVMH does not provide guidance, merely reiterating in familiar wording its plan to reinforce its global leadership position in luxury goods.
“In the buoyant environment of the beginning of this year, albeit marked by geopolitical uncertainties, LVMH will continue to focus its efforts on developing its brands, maintaining strict control over costs and targeting its investments on the quality, excellence and innovation of its products and their distribution,” it said.
Rogerio Fujimori, an analyst at RBC Capital Markets, noted the company’s shares were up 28 percent so far this year, but the strong fashion and leather goods division sales should be enough to sustain the upward momentum of the stock price.
RBC has a price target of 340 euros on the shares, which closed up 0.75 percent at 329.75 euros on the Paris Stock Exchange on Wednesday, before results were released. Rival Kering is set to publish its first-quarter revenues on April 17, while Compagnie Financière Richemont will unveil its annual results on May 17.