Profits surge in 2002 as LVMH posts 4% sales rise

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LVMH, Moët Hennessy Louis Vuitton today announced consolidated sales for 2002 of ?12.7bn ($13.5bn), a rise of 4% over 2001 following accelerated growth in the final quarter

The luxury goods group said it expected operating profits to rise 25% for the year as second half profit growth surged ahead of the 19% increase posted in the first half of 2002.

Sales in the fourth quarter rose 8% compared to a year before, and by 16% on a constant exchange rate basis. Louis Vuitton was among the top performers in this period, recording sales growth in the final quarter of 23%.

LVMH said DFS Group sales have risen since September, but have yet to return to 2000 levels. The Selective Distribution division, of which DFS is part, saw sales rise in the final quarter although full-year sales slipped 5%.

The major champagne brands Moët & Chandon, Veuve Clicquot, Dom Perignon and Krug all recorded strong volume growth in 2002, notably in the US, UK and Japan. Hennessy continued to gain market share with growth coming notably in Asia (excluding Japan), and the US as well as Europe where Fine de Cognac was launched. Sales figures for the Wines and Spirits business group in general were negatively impacted by exchange rates in the fourth quarter. On a constant exchange rate basis, and excluding Pommery, which was sold in May 2002, sales increased 11% in 2002 for the business group.

The Fashion & Leather Goods business group recorded sales growth of 16% in 2002. Louis Vuitton benefited from new products such as the Tambour watch, for which there is a worldwide waiting list, the Papillon bag and the leather collection designed by Bob Wilson, as well as the demand for the more traditional products.

Annual sales in the Perfumes & Cosmetics business group increased, for the fourth consecutive year, faster than the market, with the launch in the second half of Dior Addict and the continued development of Givenchy pour Homme in Europe.

The Watches & Jewelry business group recorded a sales increase for LVMH brands of 4% in 2002 while the planned reduction in the production and sales on behalf of third party brands outside the group continued, resulting in a 1% increase in overall sales in 2002. Montres Christian Dior recorded strong sales growth, thanks to the success of its latest creation, the Riva Sparkling. TAG Heuer enjoyed progress in all its key markets and also captured market share, said the group.

LVMH admitted that the ?economic, political and financial environment remains difficult, but said it would continue to develop its 'star' products.