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It’s In The Bag For LVMH

0410_LV

Image source: andersphoto / Shutterstock.com

What's going on?

LVMH, the world’s biggest luxury goods company and owner of iconic brands like Christian Dior, Moët & Chandon and Marc Jacobs, sashayed past industry analyst expectations to post bumper results for the first quarter of 2018.

What does this mean?

Following a tough 2016, with worries over the future long-term demand for luxury products, LVMH rebounded this time last year – and ended up enjoying record-breaking performance throughout 2017.



The good news is now continuing, with the ritzy retailer reporting organic sales growth (excluding the effect of currency fluctuations) of 13% in the first quarter. This was led by impressive numbers at its largest division, the all-important (and iconic) fashion and leather goods business, which turned out to be great: sales grew by a trendy 16% versus the same period last year.

Why should I care?

For markets: LVMH: Louis Vuitton Making Hay.

LVMH is often thought of as the luxury industry’s bellwether, giving investors an indication of how other luxury companies are likely to be doing. This first quarter may give them a reason to be optimistic. Aside from the usual suspects – the likes of Kering (which owns Gucci) and Richemont (which owns Cartier and recently signed a deal to take full control of online mavens Yoox Net-a-Porter) – investors will also be looking for clues as to how things are going at Burberry, which is currently in the middle of trying out a new look.

The bigger picture: Consumers around the world are treating themselves.

Many luxury outfits were buoyed by the return of Asian shoppers over the course of 2017, but for LVMH, the trend is worldwide. The company said that the US, Europe and Asia all delivered “good growth” last quarter, despite overall consumer spending declining in both the US and the UK.

Originally posted as part of the Finimize daily email.

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