1Q18 Update

LVMH Moët Hennessy Louis Vuitton grew total revenues by 10% in 1Q18. Organic revenue growth, which is the change in revenues based on a comparable structure and at constant exchange rates, stood at 13% in the first quarter. Organic growth was 15% once the impact of the termination of the Hong Kong International Airport concession at the end of 2018 was excluded. These figures marked an acceleration from 11% organic growth in the final quarter of 2017. LVMH reported the following segment revenue growth for 1Q18:

• Wines and Spirits posted organic growth of 10%; revenues were flat as reported.
• Fashion and Leather Goods revenues were up 16% on an organic basis and up 25% as reported. Management pointed to a “remarkable” quarter for the Louis Vuitton brand and an “excellent performance” at Christian Dior Couture, which was consolidated into the group in July 2017.
• Perfumes and Cosmetics revenues rose by 17% on an organic basis and were up 8% as reported.
• Watches and Jewelry reported organic growth of 20% and revenue growth of 9% as reported. Bulgari enjoyed “an excellent performance.”
• Selective Retailing, which includes DFS travel stores, the Sephora beauty chain and Le Bon Marché department store, saw a 9% rise in organic sales, but reported sales were down 2%. The company noted that, stripping out the termination of the Hong Kong International Airport concession, organic growth for this segment was 16%. Management said that Sephora “continued to gain market share around the world” and that its online sales grew rapidly.

Outlook

The company issued no guidance. For FY18, analysts expect the company to grow revenues by 5.6% and EBIT by 9.6%, to yield an EBIT margin of 20.2% versus 19.5% in FY17. Consensus calls for net profit to increase by 8.7% in FY18.