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French luxury goods giant LVMH Moet Hennessy Louis Vuitton SA (MC.FR) Wednesday said revenue in the first quarter rose 25% to EUR6.58 billion, as demand for high-end handbags, expensive spirits and pricey watches remained strong at the beginning of the year.
Revenue was slightly higher than an average forecast of EUR6.43 billion in a Dow Jones Newswires analyst poll. LVMH said it will strengthen its leadership of the luxury industry in 2012 and will maintain a "strict control over costs."
The company's revenue growth, which came in at 14% on an organic basis, was further boosted by the acquisition of Italian jeweler Bulgari and positive currency effects. In LVMH's watches and jewelry division, sales increased 141% to EUR630 million from a year earlier.
Revenue at the fashion and leather goods division, home to the company's famous monogramed handbag brand Louis Vuitton, rose 17% to EUR2.37 billion.
The wine and spirits division, which includes Cloudy Bay wine and Moet & Chandon Champagne, posted a 22% increase in revenue to EUR926 million, compared with a strong performance in the same period of 2011, when high demand in the U.S. and Asia lifted sales.
LVMH results came one day after U.K. competitor Burberry Group PLC (BRBY.LN) reported a 19% rise in its second-half sales. Despite a solid performance, Burberry's shares fell Tuesday as investors continued to question the sustainability of the luxury sector's recent boom.
French rival Gucci parent PPR SA (PPR.FR) will release first-quarter sales April 25 after market close.
LVMH shares have gained around 16% over the past six months, outperforming the CAC 40 index, up close to 3% over the same period.
LVMH shares closed at EUR130.5 on Tuesday.
-By Nadya Masidlover, Dow Jones Newswires; +33 1 4017 1740; [email protected]
(Inti Landauro contributed with this article.)