LVMH Q1 sales lifted by strong Chinese rebound

PARIS (Reuters) – LVMH, the world‘s largest luxury company, reported a 17% rise in first-quarter sales, more than double analysts’ expectations, as China rebounded after COVID-19 lockdowns.

Sales at the French company, which owns the Louis Vuitton and Dior fashion houses, as well as Hennessy cognac and U.S. jeweler Tiffany, came to 21.04 billion euros ($23.10 billion) for the three months to end-March.

The 17% growth on an organic basis, which strips out the effect of currency fluctuations and acquisitions, compared with analysts expectations for 8% growth, according to a Visible Alpha consensus.

The figures for LVMH, a bellwether for the high-end industry that has proven resilient to rising inflation and market turmoil, offered the first snapshot of the scale of the Chinese rebound after lockdowns dented sales at the end of 2022.

They will also help placate investor concerns about a slowdown in the U.S. market, where the strong demand that boosted European fashion houses last year is showing signs of waning, particularly among younger, lower-spending shoppers.

LVMH said first-quarter sales grew by 14% in Asia, excluding Japan, and by 8% in the United States. That compared with flat revenues in Asia and 15% growth in U.S. sales for last year.

“Asia experienced a significant rebound,” the company said in a statement.

LVMH made 27% of its 2022 revenues in the Americas, and 30% in Asia excluding Japan.

LVMH‘s shares have risen 23% since the start of the year, outperforming a 14.5% rise in the French blue-chip index and giving the luxury goods group a market capitalisation of 420 billion euros, cementing its lead as Europe’s most valuable company.

($1 = 0.9109 euros)

(Reporting by Mimosa Spencer, editing by Silvia Aloisi and Sharon Singleton)