The luxury goods industry appears headed for a happy Christmas after LVMH, the industry leader in terms of sales and market value, reported higher-than-expected sales in the third quarter of the year. The group saw continued double-digit growth in the fashion and leather goods business – driven by Louis Vuitton – led to a 23.4 per cent increase in sales to €5.1bn ($7.2bn) in the three months to the end of September from the same quarter the previous year.
Sales were up 14 per cent on a like-for-like basis, beating expectations of an 11 per cent rise.
This week Burberry also reported double-digit sales growth in the same quarter.
Analysts at Citi said the strength in demand boded well for the end of the year: “As restocking effects are now over across most luxury product categories, third quarter sales trends at LVMH and the broader sector are more closely aligned with underlying consumer demand – a positive in the run-up to Christmas.”
LVMH said its DFS airport business benefitted from “a significant increase in Asian travellers.”
After a strong first half in which net profits rose 53 per cent, the pace of growth at LVMH was expected to wane in the second half.
“Given that the comparables were tough, this marks an underlying acceleration in the third quarter against the already very strong first half,” said analysts at JPMorgan.
In the first half of 2010, sales grew by 14 per cent like-for-like and fell by 7 per cent in the first six months of 2009. While organic sales growth was maintained at 14 per cent in the third quarter, this was compared to a fall of 3 per cent in the third quarter of 2009.
LVMH said re-iterated its “confidence” for 2010, without giving more specific guidance.
Source: Financial Times
Image: Louis Vuitton logo