By Carol Ryan
With a 12% jump in European morning trading, Louis Vuitton's owner is on track for its best day on its home stock market in almost 15 years. It shows just how fearful luxury investors had become.
LVMH Moët Hennessy Louis Vuitton, the world's biggest luxury goods company, released slightly better-than-expected results after the Paris market closed on Thursday. Sales rose 10% in the fourth quarter of 2023 compared with a year earlier.
Investors had been expecting worse news. LVMH's shares touched a 14-month low last week. The luxury earnings season has been a mixed bag so far, with profit warnings from Burberry and Watches of Switzerland and a strong performance from Cartier's owner Richemont.
While demand at LVMH is weaker than what it experienced during the pandemic, sales growth is still slightly above its 9% 35-year average, analysts at Citi noted.
One eye-catching detail was a 4% increase in sales at the company's wine and spirits division, which had previously been shrinking because of a slowdown in the U.S. LVMH's Sephora cosmetics chain is also surging, somewhat undercutting the thesis that only the most expensive goods sold to the wealthiest luxury customers can prove resilient.
LVMH's U.S. business bounced back during the festive season, rising 8% over the last three months of 2023. That is a big improvement on the 2% it managed in the third quarter.
The company has raised the bar for the whole sector. Shares in its cross-town rivals Kering and Hermès, which report numbers in early February, gained 6% and 4% respectively.
In a more volatile luxury market, companies like LVMH that own a wide range of brands are proving their worth.
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(END) Dow Jones Newswires
January 26, 2024 09:07 ET (14:07 GMT)
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