By Matthew Dalton 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 29, 2020).

PARIS -- LVMH Moët Hennessy Louis Vuitton SE reported record results last year, driven by strong growth at the fashion houses Louis Vuitton and Christian Dior.

Revenue rose 15% to EUR53.67 billion ($59.17 billion) and net profit 13% to EUR7.17 billion, both record highs. All divisions grew, led by fashion and leather goods -- including Louis Vuitton and Dior -- where revenue surged 20%. The results were in line with analysts' expectations.

LVMH is the world's largest luxury-goods company, and its results are considered a bellwether of the industry as a whole. But the Paris-based conglomerate in recent years has outperformed most of its competitors, gaining market share.

Louis Vuitton is the world's best-selling luxury brand. LVMH also owns the Italian jeweler Bulgari, cosmetics retailer Sephora, cognac maker Hennessy and dozens of other brands.

It struck a deal last year to buy the American jeweler Tiffany & Co., making LVMH the world's largest jeweler.

The company has powered through protests in Hong Kong for much of the year, relying on its geographic diversification to serve clients who are avoiding the city, long a magnet for luxury shoppers.

Sales in Hong Kong fell sharply in the fourth quarter but had little impact on the group's overall performance.

The year capped a decade of uninterrupted revenue growth at LVMH, each year setting a new record high for the group. While sales have been buoyed by some acquisitions -- Bulgari in 2011, the ready-to-wear division of Dior in 2017 and the luxury hotel chain Belmond last year -- most of the increase is due to sales growth at brands the group already owned, in particular Louis Vuitton.

The period saw LVMH ride a wave of demand for luxury goods from Chinese shoppers, who travel the world to shop at the conglomerate's boutiques. But now LVMH and other luxury companies face the threat of the coronavirus in China, where the government has quarantined Wuhan, the outbreak's epicenter. The virus has thrown Chinese consumers' travel plans into turmoil just as the shopping season of the Lunar New Year has arrived. Chinese shoppers are the luxury industry's most important clientele, representing more than a third of global sales, according to consulting firm Bain & Co.

Bernard Arnault, the chief executive and controlling shareholder of LVMH, said he has asked his teams in China about the impact of the outbreak.

"It's very early to have an answer," Mr. Arnault said Tuesday, speaking to reporters and analysts.

If the consequences of the outbreak are felt through March, "that wouldn't be terrible," he said. "If it lasts two years, that would be another story."

Growth slowed somewhat in the fourth quarter, reflecting tax issues in Japan and unrest in Hong Kong. Hennessy also sold cognac to distributors ahead of the winter holiday season in the third quarter -- earlier than normal -- lowering sales in the fourth quarter. The company also wrote off stock of some smaller cosmetic brands in the U.S.

Write to Matthew Dalton at Matthew.Dalton@wsj.com

 

(END) Dow Jones Newswires

January 29, 2020 02:47 ET (07:47 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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