MC Lvmh Moet Hennessy Louis Vuitton SE

By Jason Chow 

PARIS-- LVMH Moët Hennessy Louis Vuitton SE's fourth-quarter revenue rose 12% as the French luxury conglomerate showed signs of resilience amid weak global economic growth and the Nov. 13 terrorist attack in Paris that curbed tourist flows to the shopping hub.

The firm, which rang in EUR10.38 billion ($11.3 billion) in sales during the last three months of 2015, was also optimistic that it would continue to grow despite the unsteady economic outlook and a major downturn in global stock markets. The company's overall organic revenue growth, which strips out the effects of currency, grew 5% in the fourth quarter.

Chief Executive Bernard Arnault said fears of a slowdown in spending among Chinese consumers, a demographic that industry experts estimate makes up over one-third of overall global luxury purchases, were overblown.

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

LVMH, which owns a multitude of brands including flagship fashion label Louis Vuitton, champagne house Moët & Chandon and cognac label Hennessy, said its full-year 2015 profit fell 37% to EUR3.57 billion. The drop was expected as the 2014 net income figure was boosted by a sale of its stake in smaller luxury rival Hermès International SA.

Removing the effect of the sale, full-year profit grew 20% as a low euro and strong tourist spending boosted sales of its fashion brands.

LVMH is often regarded as a bellwether for the entire luxury sector as 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. The results show that LVMH was better able to weather the many challenges facing the industry at the end of the year: The effect of terror attacks and threats and slowing economic growth in emerging markets.

The group also benefits from the drop in the euro's exchange rate against major currencies, which helps in two ways: Sales abroad translate favorably when converted into euros, while the low currency attracts tourist shoppers to splurge in Europe. Chinese tourists, in particular, were driven to shop in Europe for most of 2015, taking advantage of the exchange rate.

That tourist flow was abruptly interrupted as international visitors canceled their trips to Europe in the wake of the November terrorist attack in Paris that killed 130 people and injured hundreds more in a brutal onslaught on restaurants, a soccer stadium and a concert venue.

Fourth-quarter organic sales in Europe grew at 6% in the fourth quarter, slower than the 12% rise over the first nine months of the year. The attacks hurt sales during the quarter, but Mr. Arnault said revenue among Paris stores have "progressively" returned and currently stand "about 4% to 5% lower than normal."

Sales in Japan remained strong in the fourth quarter, as the country benefited from a strong flow of Chinese tourist shoppers. Revenue rose 13% in the fourth quarter while sales in the rest of Asia declined 2% in the quarter.

Mr. Arnault said sales in Hong Kong, a former favored shopping hub for mainland Chinese consumers, remained depressed as the region was hit by a negative effect on currency and a political climate that discouraged visitors from mainland China. Hong Kong has imposed new visa restrictions to restrict the number of visitors from China, a reaction to local concerns that the city was becoming overcrowded with tourists and shoppers from the mainland.

"Hong Kong is cyclical," he said. "It has its highs and lows. Now, it's at a low point."

Organic growth of sales at the firm's Fashion and Leather Goods division, which includes juggernaut Louis Vuitton was at 3% $3.5 billion during the fourth quarter. Though the division trailed other business lines--the Wines and Spirits division rose 4% organically in the fourth quarter, for example--Mr. Arnault said that sales were particularly strong at Louis Vuitton, which posted record sales in December.

Under creative director Nicolas Ghesquière, who was appointed more than two years ago, Louis Vuitton has moved to burnish its reputation as one of the most prestigious brands and revive sales.

Fourth-quarter organic sales growth in the U.S. was at 5%, slower than the annual 9% increase for the entire year. LVMH said sales of cognac were particularly strong.

The U.S. market is responsible for about a quarter of the group's total revenue.

LVMH said it would increase its divided by 11% to EUR3.55 a share.

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

(END) Dow Jones Newswires

February 02, 2016 16:55 ET (21:55 GMT)

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