Asia, US propel LVMH luxury sales in first quarter

Sales at French luxury goods group LVMH bounced back far more quickly than expected in early 2021, carried by demand for Louis Vuitton handbags and Dior products as Chinese and U.S. shoppers made the most of an easing of coronavirusdisease  restrictions, Reuters reports.

LVMH, the sector’s biggest company and owner of more than 70 brands ranging from Moet & Chandon champagne to Guerlain cosmetics, on Tuesday posted first-quarter revenues that even exceeded 2019 levels, before the pandemic.

Its like-for-like sales, which strip out the effect of currency changes and its acquisition of U.S. jeweller Tiffany, rose by 30% year-on-year in the three months to March to 14 billion euros ($16.70 billion).

That was nearly double an analyst consensus forecast for 17 percent growth cited by UBS. Compared with pre-pandemic levels and the first quarter of 2019, like-for-like sales were up by 8 percnt.

Sales in Asia, excluding Japan, were up by 86 percent from year-ago levels, and in the United States, which is rolling out a massive stimulus program, revenues grew by 23 percent.

That contrasted with a 9 percent drop in Europe in the period, where economies are also expected to recover this year, but some countries, including France and Italy, have brought in new lockdowns to control rising infection rates.

Across much of Asia, stores have been open since last spring. Luxury customers have begun buying more pricey goods online too, which helped Vuitton for instance, though LVMH said this remained a minor factor overall.

“Nothing replaces store visits, you can just improve it with a visit before online,” finance chief Jean-Jacques Guiony told a conference call with analysts.

LVMH’s revenues had dropped by 16 percent last year, and its airports duty free business is still struggling.

But its fashion and leather goods division, which houses Vuitton, Dior and brands such as Fendi and which accounts for nearly half of LVMH’s revenues, recorded a 52 percent increase in like-for-like sales, again way above analysts forecasts of a 27 percent rise.

The watches and jewelry division’s sales grew  by 138 percent when including acquisitions and exchange rate effects, benefiting from the consolidation of Tiffany.

LVMH completed the US$15.8 billion acquisition in early January after a legal battle.