LVMH bucks luxury slowdown to post record sales
LVMH bucked the slowdown in the global luxury market, posting a 4 percent increase in sales last year to a record 29.15 billion euros ($39.5), although net profits were flat at 3.4 billion.
The top luxury group said its profits from recurring operations broke the 6 billion euro level for the first time, rising 2 percent to 6.021 billion.
Last year "saw another excellent performance from LVMH despite exchange rate volatility and slower growth in the European markets," the company's chief executive Bernard Arnault said in a statement.
Organic growth slowed to 8 percent from the 9 percent recorded in 2012.
The results were slightly below expectation of a net profit of 3.5 billion euros on sales of 29.34 billion with profit from recurring operations at 6.05 billion, according the consensus of analysts polled by Dow Jones Newswires.
LVMH, whose stable of brands includes Louis Vuitton, Givenchy, Moet & Chandon, Dom Perignon, Guerlain, kept its operating margin stable near 21 percent.
Sales in the fashion and luxury goods segment, the biggest for the group, dipped 0.4 percent to 9.9 percent in reported terms but grew 5 percent on an organic basis, which eliminates exchange rate fluctuations and changes in the company's structure.
Watches and jewelry also dipped on a reported basis, but other segments reported sales growth in both reported and organic terms.
Arnault explained the slowdown in growth to the headwinds hitting the sector due to the global economic situation, as well as developments in certain countries such as China, where a crackdown on corruption has hit sales of luxury items.
The strong euro also hurt the results and the company shifted its offer, including in Louis Vuitton where it new favours the high-end leather bags instead of other models.
The French company nevertheless expressed confidence for its outlook.
"Despite an uncertain economic environment in Europe, LVMH is well-equipped to continue its growth momentum across all business groups in 2014," it said in a statement.
The company's management proposed a 7 percent increase in its dividend payment to 3.10 euros per share.
© 2014 AFP