Source: Company reports
1Q16 RESULTS
French luxury brandLVMH reported net revenues of€8,620 million in 1Q16 (which ended March 31), up3.6% from €8,323 million in 1Q15butmissing the consensus estimate of €8,740 million. Organic revenue growth was 3.0% during the period.
SALES BREAKDOWN BY BUSINESS GROUP
- The Wines and Spirits segment grew by 4% year over year and by 6% organically in the quarter. Champagne and Hennessy performed strongly in Europe and in the US.
- Comparable sales growth and organic growth remained flat in the Fashion and Leather Goods business group. Fendi performed well in this segment, driven by its leather and ready-to-wear lines.
- Comparable sales in the Perfumes and Cosmetics segment grew by 7% year over year. Organic growth was 9%. The company noted strong performance by its newly launched perfume, Poison Girl, and stated that Guerlain has expanded La Petite Robe Noire into a makeup line based on the success of its perfume of the same name.
- The Watches and Jewelry segment also saw comparable sales growth and organic growth of 7% in the quarter. The company noted that this segment outperformed the market, thanks to the success of the Bulgari and TAG Heuer brands.
- In the Selective Retailing business group, comparable sales growth and organic growth were 4% in the quarter. The company noted that Sephora continued to gain market share globally. It stated that the opening of the T Galleria, part of the DFS (Duty-Free Shopping) Group owned by LVMH, in Cambodia was the highlight of the quarter.
PERFORMANCE BY GEOGRAPHY
LVMH commented that its business in the US remains strong. It also noted that, while the company is well positioned in Europe, its business in France was affected by a fall in tourism. LVMH said that business in Japan “continues to progress,” while the Asian markets are otherwise “varied.”
The company reiterated its commitment to strengthening its global leadership position in luxury goods by controlling costs and focusing its investments on the quality and innovation of its products.
