3Q16 SALES RESULTS

Luxury goods and retailing giant LVMH reported 3Q16 sales performance; it did not report profit data. 3Q16 revenue of €9.1 billion was above the consensus estimate of €9.0 billion, according to S&P Capital IQ. 3Q16 organic revenues increased 6% year over year, showing a sequential quarterly acceleration from 4.0% organic growth in 2Q16 and 3.0% in 1Q16.

GEOGRAPHIC SALES BREAKDOWN

The company noted significant improvement in Asia, excluding Japan, in 3Q16. The US and Europe, excluding France, remain well positioned.

GROWTH BY SEGMENT

In its Wines & Spirits business, 3Q16 organic revenues grew by 4% year over year, showing a clear decelerating trend from very strong organic growth in 2Q16 of 13%. The US continued to enjoy strong growth and China showed improved momentum during the period, following the destocking of distributors in 2015. In Fashion & Leather Goods, total organic revenues grew by 5% year over year, showing a quarterly sequential improvement from +1% in 2Q16 and flat in 1Q16. Louis Vuitton maintained strong momentum and ventured into new territory with the launch of Louis Vuitton perfumes, and the Fendi brand generated significant revenue growth. In the Perfume & Cosmetics business, organic revenues grew by 10% year over year. Parfums Christian Dior continued its strong performance, gaining market share in all countries. The launch of the new perfume Kenzo World was a success, and Benefit, Make Up For Ever, Fresh and Kat Von D each delivered an “excellent performance.” In Watches & Jewelry, organic revenue increased by 2% year over year, showing a flat trend to 2Q16. Bulgari continued to gain market share and TAG Heuer made “great progress” in a difficult market, benefiting particularly from the success of new collections and its smartwatch. In Selective Retailing, organic revenues grew by 8%. Sephora continued to gain market share in all geographic markets, recording double-digit revenue growth. Sephora online sales rapidly increased in all regions.

 GUIDANCE

Analysts estimate that LVMH will generate €37.1 billion in net sales in FY16, along with €6.8 billion in EBIT and EPS of €7.93. Consensus estimates imply FY17 year-over-year revenue growth of 4.0%, EBIT growth of 2.6% and EPS growth of 7.6% year over year.