MC Lvmh Moet Hennessy Louis Vuitton SE

By Jason Chow 

PARIS--Shares in LVMH Moët Hennessy Louis Vuitton SE jumped as much as 7% on Wednesday as investors were encouraged by the French luxury group's strong fourth-quarter revenue growth and Chief Executive Bernard Arnault's confidence that Chinese consumers would keep spending on expensive handbags and pricey liquor.

Shares were trading at EUR154.50 by midday, off a morning peak but still 6% higher than the previous day's close.

LVMH reported Tuesday evening a 12% rise in fourth-quarter revenues, fueled by strong demand for its fashion and leather goods as well as its alcoholic drinks. The luxury bellwether--LVMH's brand portfolio includes fashion, accessories, liquor, jewelry and watches as well as the DFS duty-free chain and the Sephora cosmetics label--showed signs of resilience amid weak global economic growth and the Nov. 13 attacks in Paris that curbed tourist flows to the French capital.

LVMH, which generated EUR10.38 billion ($11.3 billion) in sales during the final three months of last year, was also optimistic that it would continue to grow despite the unsteady economic outlook and a major downturn in global stock markets.

Mr. Arnault said that fears about a slowdown in sales to Chinese consumers--a demographic that experts say make up more than a third of total overall global luxury spending--were overblown.

"Analysts underestimate the Chinese economy," he said Tuesday evening. "The fundamentals are good. Household spending is still increasing, and that's important to us."

Mario Ortelli, a luxury analyst at Sanford C. Bernstein, said he was "encouraged by the company CEO's confidence going into 2016 despite the volatile economic environment."

However, not all in the luxury industry are faring well. Swatch Group AG, which owns high-end brands including Longines, Breguet and Omega, said Wednesday net profit fell to 1.09 billion Swiss francs from 1.38 billion francs, hurt by the strength of the Swiss currency and weak demand for expensive timepieces. The profit figure was also below analysts' expectations.

That news sent shares in the Swiss watch company down as much as 4% in early trading, before rebounding later in the day. At midday, the shares were trading at 333.20 francs, or about 2% lower than Tuesday's close.

Swatch declined despite the company's decision to buy back 1 billion Swiss francs ($982 million) of its shares. Analysts at Citi said there was "not much to cheer for" in the latest results, which reflected "adverse macro and geopolitical environment, global price gap distortion from [foreign-exchange] volatility and further demand weakness for Swiss watches in Hong Kong."

John Revill in Zurich contributed to this article.

Write to Jason Chow at jason.chow@wsj.com

(END) Dow Jones Newswires

February 03, 2016 07:48 ET (12:48 GMT)

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