Money Matters - Simplified

LVMH Q1 sales rise 13%

All the divisions of the group recorded double digit organic growth. For instance, the fashion and leather goods unit posted 1.73 billion euros as sales. This is 8 percent up compared to the same period last year.

Backed by market recovery in Europe and United States, LVMH Moet Hennessy Louis Vuitton, the world's biggest luxury group, recorded increase in sales in the first quarter this year.

The France based luxury goods giant reported 13 percent rise in sales as distributors placed orders for wine and high-end jewelry, products that performed the worst in the quarters gone by.

Analyzing the accelerating sales
LVMH, whose well known brand include Moët et Chandon, Krug, Hennessy, Louis Vuitton, TAG Heuer, and Zenith among others, reported 4.472 billion euros as sales.

This is higher than sales of 4.02 billion euros recorded in the same period a year earlier. Further, the figure is much better than what the luxury group had anticipated.

LVMH had adversely been affected by the financial crisis and its sales had decelerated from 5 percent in the first half to 3.1 percent in the third quarter last year.

All the divisions of the group recorded double digit organic growth. For instance, the fashion and leather goods unit posted 1.73 billion euros as sales. This is 8 percent up compared to the figures from the same period last year.

The largest increase was reported by watches and jewelry unit as sales increased 34 percent, to 204 million euros.

The wine and spirits division witnessed 18 percent jump in sales, to 635 million euros.

In a statement, the company said, "The group continues to perform well in Asia and has seen a strong rebound in the United States and Europe."

Recovering from downturn
LVMH had adversely been affected by the financial crisis, and its sales had decelerated from 5 percent in the first half to 3.1 percent in the third quarter last year.

The effect of recession was felt across all the divisions of the luxury goods giant.

LVMH's star Louis Vuitton, which has posted growth of more than 10 percent in the first half last year, reported sales growth of less than 10 percent in the third quarter.

The wines and spirits division, which showed strong performance in Russia and China, reported decline in sales in rest of the world.

But the luxury group showed tangible improvement in the fourth quarter of 2009, after sales accelerated 1 percent following increase in demand for luxury goods.

The increase in demand was largely led by the emerging markets, prompting the luxury group to forecast revenue growth in 2010.

In a statement in February, Bernard Arnault, group’s chairman had said that 2010 will be a tough year for the company “but the trend is improving.”