LVMH smashes analysts’ expectations
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LVMH smashes analysts’ expectations

French luxury giant LVMH has just reported a fantastic set of quarterly figures. For the three months to Sept. 30, the company saw organic sales growth in its perfumes and cosmetics division rise by 17% - that’s almost double the 9% that analysts had expected to see. What’s more, all of LVMH’s divisions handily beat expectations with the exception of wine and spirits – but that was due to supply constraints. Partly, LVMH can be seen as a company riding the wave of luxury revival in 2017 – but there’s no doubt that its peers will have trouble matching this set of figures!

LVMH’s share price is up by 28% year to date

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SOURCE: Yahoo Finance

Perfumes and cosmetics benefited from the launch of global music sensation and fashion icon Rihanna’s Fenty Beauty range at Sephora. But in between this high note and the underperforming wines and spirits division sits a handful of strong performers. Watches and Jewelry saw organic sales growth of 14% against consensus estimates of 11%, Selective Retailing also saw a 14% rise in organic sales against expectations of 10%, and Fashion and Leather Goods experienced growth of 13% against a forecasted 9%. 

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LVMH’s latest earnings demonstrate quite clearly that its market leadership positions in leather goods and cosmetics are not overstated. And, perhaps surprisingly, that the latter sector is still expanding despite a strong couple of years. What’s more, it is better positioned to weather potential setbacks to the luxury sector than other players in the space: it’s diversified, it has hugely powerful brands and economies of scale, and it will be integrating Christian Dior, which it acquired earlier this year. Makeup or not – LVMH looks pretty good at the moment.

Disclosure

Dominion holds LVMH in its Global Trends Luxury Fund,


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