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PARIS, France — LVMH Moet Hennessy Louis Vuitton SA, the world's largest luxury-goods company, reported first-quarter sales that trailed analysts' estimates as revenue from wine and spirits dropped on destocking by retailers in China.
Revenue advanced 4 percent to 7.21 billion euros ($10 billion), Paris-based LVMH said today in a statement after European markets closed. Analysts predicted 7.4 billion euros, according to the median of 17 estimates compiled by Bloomberg. Sales climbed 6 percent, excluding acquisitions, disposals and currency swings.
Wines and spirits sales fell 3 percent on an organic basis, LVMH said. The trend is explained by the performance of cognac in China, linked to current destocking by retailers, LVMH said.
LVMH is introducing more expensive products at handbag maker Louis Vuitton, while increasing investment at some of its smaller fashion brands amid competition from lower-priced labels such as Michael Kors and Coach Inc. Italian rival Prada SpA last week forecast slowing same-store sales growth in the financial year through January 2015, citing a strong euro and weakening demand in China.
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Sales of the fashion and leather-goods unit climbed 9 percent on an organic basis, compared with a 3 percent gain in the first quarter of 2013. The division's total sales advanced 11 percent, boosted by last year's acquisition of Italian cashmere clothier Loro Piana SpA and British shoe brand Nicholas Kirkwood.
LVMH doesn’t report earnings at the end of the first quarter. The shares rose 1 percent to 136.45 euros today in Paris, giving the maker of Celine sandals and Belvedere vodka a market value of 69.3 billion euros. They have advanced 2.9 percent this year.
The luxury market will probably grow 5 percent to 6 percent annually though 2017, according to Sanford C. Bernstein.
By Andrew Roberts; Editors: Celeste Perri, Thomas Mulier
