LVMH sets upbeat tone for luxury brands as China demand rolls on
First-quarter sales rose 13 per cent, beating analysts’ expectations, as mainland consumers snap up Louis Vuitton handbags and Givenchy make-up
LVMH set an upbeat tone for the luxury industry, ploughing ahead with double-digit sales growth that beat analysts’ estimates for the start of the year.
First-quarter sales rose 13 per cent on an organic basis, the Paris-based owner of Sephora and Christian Dior said on Monday after Paris markets closed.
Analysts had estimated a rise of 8.5 per cent, projecting growth to taper off after a 12 per cent jump last year.
Prosperous Chinese consumers have been stocking up on LVMH’s Louis Vuitton handbags and Givenchy make-up, powering record sales last year for the company with the highest market value in France.
Gucci owner Kering and Birkin bag-maker Hermès International benefited, too.
While China’s economic growth is expected to slow to 6.5 per cent in 2018 compared with 6.9 per cent last year, according to forecast data compiled by Bloomberg, the strong sales show that demand for luxury products remains high.
This is a remarkable start to the year for LVMH, with broad-based market share gains in a buoyant environment for luxury goods
“This is a remarkable start to the year for LVMH, with broad-based market share gains in a buoyant environment for luxury goods,” says Rogerio Fujimori, an analyst at RBC Europe, who rates the shares the equivalent of buy, in a note to clients.
