LVMH shares at record high as sales show sector rebound

Stock gained as much as 2.9%, the steepest intraday advance in more than a month

LVMH shares rose to a record in Paris after the luxury leader’s sales far exceeded estimates on rebounding demand for items from Louis Vuitton bags to Hennessy cognac.

Figures released after markets closed on Monday showed first-quarter organic revenue rose 13 per cent, compared with the 8 per cent median forecast. All divisions beat estimates, with the fashion and drinks units standing out. The stock gained as much as 2.9 per cent to €213.50 (Dh832), the steepest intraday advance in more than a month.

Investment in brands such as Louis Vuitton has enabled LVMH to extend its leadership of an industry that’s undergoing a turnaround after several years of ebbing demand in China and a slowdown in travel to Europe. The performance benefited from comparison with a period of last year when the industry was struggling with the aftermath of terror attacks in Paris. Such levels of growth shouldn’t be expected for the full year, the company said.

Sector bellweather

“As the sector bellwether, LVMH’s beat should support the luxury space,” wrote Rogerio Fujimori, an analyst at RBC Europe. The results “also raise the bar for other stocks reporting in coming weeks.”

Prada SpA is due to report full-year earnings April 12, while Gucci owner Kering SA will announce first-quarter results on April 25. Kering shares rose 1.4 per cent in Paris.

LVMH’s quarterly sales rose 15 per cent to €9.88 billion ($10.5 billion).