LVMH announced strong sales in Europe and the U.S. improved profitability last year, despite slower demand from China as corruption crackdown takes a toll on high-end shoppers.
LVMH’s net profit grew 65 percent to EUR5.65 billion ($6.47 billion) from EUR3.44 billion last year. This was boosted by an unusual capital gain brought about by its divestment of its 23 percent interest in competitor Hermès International SCA.
Fourth-quarter sales advanced 10 percent to EUR9.24 billion compared to EUR8.39 billion for the same quarter of 2013. LVMH noted that last year’s figures have incorporated the latest accounting standards.
Median forecast of 11 analysts interviewed by Dow Jones Newswires expected revenue to reach EUR30.5 billion. However, the actual revenue figure slightly surpassed this forecast. Organic revenue growth, or growth discounting the effect of foreign exchange volatility, asset sales, and acquisitions edged up 5 percent in 2014. Louis Vuitton’s group, the fashion and leather goods business, improved 10 percent for the year.
LVMH sees a positive outlook, saying 2015 is welcomed with “confidence” amidst the current economic, geopolitical as well as foreign exchange uncertainties.
LVMH Moët Hennessy Louis Vuitton Société Anonyme, more popularly known as LVMH, is a French conglomerate specializing in multinational luxury goods and is headquartered in Paris. The company was the result of a 1987 merger between fashion house Louis Vuitton and Moët Hennessy, a company formed after Moët & Chandon (champagne producer) merged with Hennessy (cognac manufacturer) in 1971. LVMH has control over approximately 60 subsidiaries that each supervises a number of the world’s prestigious brands. The oldest among LVMH brands is wine producer Château d’Yquem (as far back as 1593).
Christian Dior, the luxury goods group, serves as LVMH’s main holding company. Dior owns 40.9% of its shares and 59.01% of its voting rights. Bernard Arnault, serves as LVMH CEO, majority shareholder of Dior and chairman of both companies.