LVMH, the world's biggest luxury group, beat forecasts with a 13 per cent rise in fourth-quarter comparable sales, boosted by a strong Christmas, and raised its dividend 27 per cent on the back of a record year.
LVMH, whose Louis Vuitton brand accounts for half of group operating profit, benefited from Chinese shoppers' growing appetite for luxury goods at home and abroad as well as from a steady rise in discretionary spending globally.
It posted a 2010 profit from recurring operations of €4.32 billion on revenue of €20.3 billion, in line with forecasts in a Reuters poll. Fourth-quarter like-for-like revenue was seen at 11 per cent.
The dividend was set at to 2.10 euros.
"It (result) is in line with expectations," Vontobel analyst Jean-Philippe Bertschy said today, noting a recovery in watches and the strong performance of Vuitton. Perfume margins were slightly lower than expected, he said.
LVMH's wines and spirits unit, which includes champagne maker Moet & Chandon, bounced back from the severe slump of 2009, together with its watches and jewellery division, home to Chaumet, Fred, Tag Heuer and Zenith.
Wines and spirits generated revenue growth of 19 per cent in 2010 and lifted their profit from recurring operations 22 per cent, as all champagne brands, particularly prestige cuvees, experienced a recovery.
Watches and jewellery saw their profit from recurring operations double last year on 29 per cent higher revenue.
Louis Vuitton had another record year, LVMH said, with double-digit growth, while Fendi "performed well".
Global luxury sales climbed 10 percent after falling 8 percent in 2009.
LVMH made a full-year net profit of €3.03 billion, which included a gain from its acquisition of Hermes shares.
Its results will come after Richemont, British handbag maker Mulberry and Italian leather goods group Tod's all reported buoyant Christmas trading and expressed optimism about 2011.
British luxury brand Burberry said it expected full-year profit at the top end of expectations.
LVMH shares rose 57 per cent in 2010, making it the top gainer on the French blue-chip CAC-40 index. They have fallen 5 per cent this year. The luxury sector suffered a re-rating last month as many investors rotated out of the sector after a strong performance last year.
Analysts said investors were concerned opportunities for earnings upgrade could become scarcer this year, limiting the potential to raise valuations.
Reuters
