LVMH soars after strong 1Q sales growth

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LVMH soars after strong 1Q sales growth
Credit: © Reuters.

By Peter Nurse

Investing.com - Shares in LVMH Moët Hennessy Louis Vuitton SE (EPA: LVMH ), the world’s largest luxury firm, soared in early European trade Thursday after it reported a sharp rise in first-quarter sales, helped by strong demand from China.

At 05:55 ET (09:55 GMT), LVMH stock rose 4.5% to €874.40, trading near to its record high. Its shares are up almost 30% year to date, resulting in a market capitalization of €438 billion (€1 = $1.1025) - more than double its level three years ago.

The French company, which owns brands like Louis Vuitton and Dior as well as Hennessy cognac and U.S. jeweler Tiffany, reported a 17% rise in sales for the three months to end-March, more than double expectations.

LVMH pointed to sales growth of 14% in Asia, excluding Japan, compared with an 8% decline in the fourth quarter of last year, with the company looking to China for much of its growth this year.

China, which is a crucial market for the high-end products sold by LVMH, was hit by a wave of COVID-19 cases in the prior quarter following a sudden decision to lift pandemic-era health restrictions.

Sales in Europe also impressed, with growth of 24%, while business in the U.S. was more subdued, growing by 8% in the quarter.

Most of the U.S. growth came from its Sephora retail chain of beauty stores, according to LVMH finance chief Jean-Jacques Guiony.

"For the rest, the business is slowing down a bit," he added.

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