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Wednesday, August 17, 2022

LVMH first quarter sales rise 15 percent, company says environment uncertain

By Sudip Kar-Gupta

PARIS (Reuters) – Luxury goods group LVMH (LVMH.PA) posted a surge in first quarter sales on Monday that beat analysts’ consensus forecast, although the French company cautioned its business environment remained uncertain.

Sales rose to 9.88 billion euros (8.44 billion pounds), up 15 percent year-on-year. According to a consensus compiled for Reuters by Inquiry Financial, analysts’ mean forecast for first quarter sales was 9.55 billion euros.

On a like-for-like or organic basis, sales were up by 13 percent at the world’s biggest luxury goods group, also beating the consensus forecast for an organic sales increase of 9 percent.

LVMH, whose shares have hit a record high this year, said it had witnessed solid growth across its main markets in Asia, Europe and the United States, but added “the trend currently observed cannot reasonably be extrapolated for the full year”.

In January, LVMH reported record revenues and profits for 2016 but sounded a note of caution for 2017, given geopolitical uncertainties ranging from the impact of Britain’s decision to leave the European Union to the new U.S. administration of President Donald Trump.

“In a particularly uncertain environment, LVMH will continue to focus its efforts on developing its brands, maintain strict control over costs and target its investments on the quality, excellence and innovation of its products and their distribution,” LVMH added in a statement on Monday.

LVMH’s outlook echoed a similarly circumspect view issued last month by Swiss watchmakers, whose executives told Reuters at a key industry fair in Basel that they expected their market to remain challenging this year.

LVMH shares closed down 0.9 percent at 207.45 euros, close to a record high of 209.30 euros reached earlier on Monday.

The stock is up by around 14 percent so far in 2017, beating a rise of around 5 percent on France’s benchmark CAC-40 index (.FCHI) and slightly outperforming a 13 percent advance on the STOXX Europe 600 Personal & Household Goods index (.SXQP).

(Reporting by Sudip Kar-Gupta; Editing by Sarah White and Mark Potter)

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