LVMH Moët Hennessy Louis Vuitton said sales decelerated slightly in the fourth quarter, despite another strong performance in its key fashion and leather goods division.
Revenues in the three months ended Dec. 31 totaled 15.27 billion euros, up 12 percent in reported terms and 8 percent on an organic basis. Analysts polled by Bloomberg had banked on an 8.7 percent increase in like-for-like sales.
This compared with a rise of 17 percent in reported terms and 11 percent in organic terms in the third quarter. The French luxury conglomerate blamed the decrease on one-off effects linked to a hike in Japan’s consumption tax, and variations in cognac inventories in the United States.Global stock markets have taken a beating in recent sessions amid market fears the coronavirus outbreak in China will hurt tourism and shopping. LVMH said sales in the fourth quarter were driven by its largest business, fashion and leather goods, home to brands including Louis Vuitton, Dior, Fendi and Celine. The division posted revenues of 6.36 billion euros, up 15 percent on an organic basis, slightly below consensus estimates of a 15.5 percent increase.
Profit from recurring operations amounted to 11.50 billion euros in 2019 as a whole, up 15 percent, setting a record for the group. The operating profit margin was stable at 21.4 percent. Net profit rose 13 percent to 7.17 billion euros, LVMH said in a statement published after the market close on Tuesday.
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After rising 65 percent in 2019, briefly making chairman and CEO Bernard Arnault the world’s richest person, LVMH’s shares have fallen 7.3 percent since Jan. 17, amid fears that consumer spending in China will decline as more people stay home over the Lunar New Year due to the coronavirus.
The industry bellwether’s quarterly sales figures come before other luxury rivals Kering, due to publish figures on Feb. 12, and Hermès on Feb. 26. Compagnie Financière Richemont reports annual results on May 15.
LVMH said its perfumes and cosmetics division clocked 12 percent growth on an organic basis, to 1.92 billion euros in the fourth quarter, while wines and spirits posted 1.65 billion euros in sales, a 3 percent rise.
Watches and jewelry and selective retailing, which includes the beauty retailer Sephora and duty-free stores DFS, both registered organic growth of 1 percent, to 1.14 billion euros and 4.23 billion euros, respectively.
This story was reported by WWD and originally appeared on WWD.com.