LVMH Moët Hennessy Louis Vuitton, the world's leading luxury product group, has announced consolidated sales in the first quarter of 2003 of €2.8 billion, with a strong 6 per cent increase in organic sales masking continued problems with exchange rates.
The company said that it had exceeded its own growth expectations for operating profits, helped by the "exceptional success" of its Louis Vuitton leather goods arm which reported a double digit increase in volume during the first three months of the year.
The champagne & wine division registered organic growth for the first quarter of 2003 on top of an over 30 per cent increase in the same period in 2002, the company said. Cognac volumes increased in the first quarter with a particularly good performance in the United States. However, total wine and spirit sales reached €407 million, down from €457 million in 2002, as a result of weak exchange rates.
There was also 6 per cent organic growth from the perfumes & cosmetics unit, helped by a strong performance from the Christian Dior range. The selective retailing arm, which includes DFS and Sephora, continued to struggle as a result of a downturn in tourist numbers, but the company said that it had implemented a series of measures aiming to adapt its cost structure and build growth.
"In the current unstable geopolitical climate, LVMH continues to focus its efforts on the development of its major brands, which showed an exceptional ability to grow both market share and profitability in 2002," the company said.
"LVMH is paying close attention to the global economic situation and accelerating the necessary steps to again improve profitability and to gain market share. LVMH confirms its objective of further tangible growth of operating income in 2003 and giving priority to cash generation.
The good geographical balance of our sales, the strength of our brands, the motivation of our teams, our policy of dynamic innovation and the quality of our products should enable the group to further reinforce its leadership in the world luxury market."