LVMH Sales Hurt by Terrorism in Paris -- Update
April 11 2016 - 2:38PM
Dow Jones News
By Jason Chow
PARIS -- A continued slowdown in tourism in France following the
Nov. 13 terrorist attacks weighed on LVMH Moët Hennessy Louis
Vuitton SE's first-quarter sales in one of its most important
markets, the luxury juggernaut said Monday.
LVMH, which owns a multitude of brands including flagship
fashion label Louis Vuitton, champagne house Moët & Chandon and
cognac label Hennessy, said its sales rose just 4% to EUR8.62
billion ($9.85 billion) during the first three months of 2016, and
it blamed weak sales in France for the tepid result.
"The U.S. market is strong and Europe remains well oriented
except for France which is affected by a fall in tourism," the
company said in its quarterly update.
The company's sales figure is below the average forecast of
EUR8.73 billion by 37 analysts polled by FactSet. LVMH doesn't
release quarterly profit figures.
LVMH is often regarded as a bellwether for the entire luxury
sector. Its portfolio includes brands that span fashion,
accessories, liquor, jewelry and watches as well as the DFS
duty-free chain and the Sephora cosmetics label. While luxury's
largest player has remained resilient to global economic volatility
in recent years, the latest results show that it remains vulnerable
to the effects of terrorist attacks.
The company's overall organic revenue growth, which strips out
the effects of currency, grew just 3% in the first quarter.
Sales in its fashion and leather-goods business, the largest
division in its portfolio which includes Louis Vuitton, Fendi and
Kenzo among others, were flat in the first quarter at EUR2.97
billion.
The year's first-quarter results are a contrast to a strong
2015. Sales surged then partly due to a strong trade among tourists
in Paris, especially those from China, as they took advantage of a
weak euro to splurge on expensive handbags and clothes.
LVMH, the first among the big European luxury companies to
report results, still proved its diverse portfolio has helped it
eke out growth.
Its spirits division saw a boost in cognac sales, a category
that struggled between 2013 and 2015 because a continuing austerity
campaign by the Chinese government has dried up thirst for the
ostentatious beverage. Sales of LVMH's wine and spirits division
rose 4%.
Meanwhile, sales at its perfumes and cosmetics division grew 7%
to EUR1.2 billion. Sales at the selective retailing division, the
company's second-largest business that includes the Sephora
cosmetics chain, rose 4%.
Write to Jason Chow at jason.chow@wsj.com
(END) Dow Jones Newswires
April 11, 2016 14:23 ET (18:23 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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