Source: Company reports/FGRT

FY17 Results

For the fiscal year ended December 2017, LVMH reported revenues that were slightly ahead of expectations and consensus-beating EPS thanks to4Q17 revenues that came in 2% ahead of consensus. For the full year:

• Revenues of €42.6 billion were up 13.4% year over year and came in marginally ahead of the €42.3 billion consensus estimate recorded by S&P Capital IQ.
• Profit from recurring operations grew by 18.0%. A 27% jump in profit from recurring operations in Fashion and Leather Goods and a 17% increase in profit in Selective Retailing contributed to the strength of the bottom line.
• Statutory operating profit climbed 17.5%, to €8,113 million, versus consensus of €8,272 million.
• Diluted EPS was €10.18, comfortably ahead of analysts’ expectations of €9.74.

The company states organic growth only in rounded figures. Group revenues are less than the sum of the revenues shown above due to eliminations such as inter-company transfers. Source: Company reports/FGRT

LVMH’s Fashion and Leather Goods segment enjoyed a strong year, with revenues up 21% in total and 13% on an organic basis (with a comparable structure and at constant exchange rates). The company noted “outstanding creativity” at the Louis Vuitton brand and “excellent performance” at Christian Dior Couture, which was fully consolidated within the group in the second half of the year. The Perfume and Cosmetics division reported strong growth in the makeup category, and Parfums Christian Dior, Guerlain and Parfums Givenchy were noted for their strong performances. The Selective Retailing segment includes beauty chain Sephora, department store Le Bon Marché and travel retailer DFS, although LVMH provides no split for these operations. The company noted that Sephora’s growth was particularly strong in North America and Asia. The beauty chain launched in Germany and expanded its e-commerce operations to Scandinavia, Mexico and the Middle East during the year. 2017 was “a positive turning point” for DFS, management stated.

4Q17

LVMH’s total revenue growth in 4Q17 came in at 11.2%, taking revenues to $12.54 billion, versus analysts’ expectations of $12.25 billion. Organic growth slowed sequentially in 4Q17 in all segments except Selective Retailing—where it was level with that of the prior quarter—and Wines and Spirits—where it reached 6%, up from4% in the prior quarter.

Outlook

Management provided no numerical guidance but stated that it was “cautiously confident” regarding 2018. For FY18, analysts expect LVMH to grow revenues by 6.5%, to €45.05 billion. Consensus calls for EBIT to climb by 9.9% and for diluted EPS to rise by 11.2%, to €10.84. These estimates were collated before the latest results were announced.