LVMH Sales Powered by Fashion and Leather Goods -- Update

By Matthew Dalton 

PARIS -- LVMH Moët Hennessy Louis Vuitton, the luxury goods behemoth, reported record results last year, driven by strong growth at Louis Vuitton and Christian Dior.

Revenue rose 15% to EUR53.67 billion ($59.17 billion) and net profit 13% to EUR7.17 billion, both record highs. All divisions grew, led by fashion and leather goods -- including Louis Vuitton and Dior -- where revenue surged 20%.

LVMH is the world's largest luxury goods company, and its results are considered a bellwether of the industry as a whole. But the Paris-based conglomerate in recent years has outperformed most of its competitors, gaining market share.

Louis Vuitton is the world's best-selling luxury brand. LVMH also owns the Italian jeweler Bulgari, cosmetics retailer Sephora, cognac maker Hennessy and dozens of other brands. It struck a deal last year to buy the American jeweler Tiffany & Co., making LVMH the world's largest jeweler.

The company has powered through protests in Hong Kong for much of the year, relying on its geographic diversification to serve clients who are avoiding the city, long a magnet for luxury shoppers.

Now LVMH is facing the threat of the Coronavirus in China, where the government has quarantined Wuhan, the epicenter of the outbreak. The virus has thrown the travel plans of Chinese shoppers into turmoil just as the shopping season of the Lunar New Year has arrived. Chinese are the luxury industry's most important clientele, representing more than a third of global sales.

Bernard Arnault, the chief executive and controlling shareholder of LVMH, said he had been querying his teams in China about the impact of the outbreak.

"It's very early to have an answer," Mr. Arnault said.

If the consequences of the outbreak are felt through March, "that wouldn't be terrible," he said. "If it lasts two years, that would be another story."

Growth slowed somewhat in the fourth quarter, reflecting tax issues in Japan and destocking of cognac in the U.S. The company also wrote off stock of some smaller cosmetic brands in the U.S.

Write to Matthew Dalton at [e-mail]

(END) Dow Jones Newswires

January 28, 2020 15:54 ET (20:54 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.