PARIS – LVMH Moët Hennessy Louis Vuitton said revenues jumped 32 percent in the first quarter, as strong sales in Asia and the United States compensated for weakness in Europe, where some countries implemented renewed lockdown measures during the period.
Group sales were up 30 percent in organic terms in the three months to March 31, versus a rise of 3 percent in the fourth quarter of 2020, and compared with a 17 percent drop during the same period last year, when the coronavirus pandemic hit, closing stores and factories, and grounding international travel.
Because of the exceptionally weak comparison base, LVMH also compared the data with 2019 in a bid to provide a better indication of its real performance. It found that group sales were up 8 percent on a like-for-like basis versus the same quarter two years ago.
Revenues in the first quarter of 2021 totaled 13.9 billion euros, well above the 12.7 billion euros forecast by analysts, according to a consensus estimate compiled by Bloomberg.
“In a context that remains turbulent, LVMH is well-equipped to build upon the hoped-for recovery in 2021 and regain growth momentum for all its businesses,” LVMH said in a statement.
Organic sales in its key fashion and leather goods division rose 52 percent year-on-year, reflecting the resilience of star brands Louis Vuitton and Dior. Compared with 2019, the division’s revenues were up 37 percent, a figure the financial community is likely to focus on as evidence of the segment’s strength.
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Analysts polled by Bloomberg had expected fashion and leather goods to post a sales increase of 30 percent year-on-year.
After falling across the board last quarter, sales in other divisions showed signs of recovery, with the exception of selective retailing, which includes Sephora and DFS, LVMH’s travel-retail business.
The wines and spirits segment saw comparable revenues rise 36 percent year-on-year, perfumes and cosmetics were up 18 percent, and watches and jewelry gained 35 percent. Selective retailing reported a 5 percent drop in revenues, after a 26 percent decrease in the prior quarter.
Compared with the same period in 2019, wines and spirits were up 17 percent in organic terms; perfumes and cosmetics down 4 percent; watches and jewelry up 1 percent, and selective retailing down a whopping 30 percent.
The quarter marked the integration for the first time of Tiffany & Co., following its acquisition, which closed on Jan. 17. The U.S. jeweler saw an “excellent” start to the year, according to LVMH.
Reflecting investor confidence, the group’s market capitalization on Tuesday crossed the threshold of 300 billion euros for the first time, having tripled since 2017.
Sales of personal luxury goods fell by 23 percent in 2020, the sharpest drop on record, according to consultancy Bain & Company. The share of luxury purchases made online nearly doubled from 12 percent in 2019 to 23 percent in 2020, it said.
For 2021, Bain forecasts growth that ranges from 10 percent to 12 percent, or 17 percent to 19 percent, depending on macroeconomic conditions, the evolution of COVID-19 and the speed of return to travel globally, as well as the resilience and confidence of local customers.
LVMH is the first major French luxury group to report first-quarter sales. Kering is due to publish its results on April 20, with Hermès International to follow on April 22.
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