Business

LVMH shares jump on record sales despite Paris attacks

LVMH Image copyright Getty Images
Image caption Louis Vuitton's Autumn Winter 2016-17 collection

LVMH's shares rose 4.5% on Wednesday after it posted record sales last year despite weakness in China, although profits were less than expected.

The world's biggest luxury goods group said sales rose 16% in 2015 to €35.67bn (£27bn). Like-for-like sales rose 6%.

The company owns a host of the world's most famous brands, including Louis Vuitton and Christian Dior.

Chief executive Bernard Arnault said trading in France was almost back to normal after the November attacks.

The Paris terror attacks resulted in falls of 50% at some stores and sales were still 4% to 5% lower. LVMH makes 10% of its sales in France.

"Over time, sales are coming back to normal," Mr Arnault said.

Net profit for 2015 was €3.57bn - lower than the €3.71bn expected by analysts. The figure was down 37% compared with 2014, although the company had €2.8bn in capital gains from selling its stake in rival Hermes that year.

LVMH shares rose €9.65 to €154.80 in morning trading in Paris on Wednesday.

The company reported strong progress in Europe, the United States and Japan which helped compensate for lower sales in Asia.

Image copyright Getty Images
Image caption Models in the Christian Dior Spring Summer 2016 show during Paris fashion week last month

Sales at the fashion and leather division, which accounted for the bulk of revenue, rose 3% in the fourth quarter, beating analysts' expectations of a 1% increase.

The division rose posted a 4% annual rise in like-for-like sales, with the perfumes and cosmetics division up 7% and watches and jewellery expanding by 8%.

Exane BNP Paribas analyst Luca Solca said the results were "a solid set of numbers with a good beat on fashion and leather".

Mr Arnault said sales growth for Louis Vuitton was "in double-digit terms", while Fendi was up more than 20%. However, the figures were flattered by exchange rates given the weak euro.

LVMH will increase the dividend by 11% to €3.55 a share.

Goldman Sachs raised its target price from €164.90 to €171.90 and rated the shares as a "buy".

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