PARIS (Reuters) – LVMH’s shares hit record highs on Thursday after the Louis Vuitton owner posted strong first-quarter sales which set a high bar for rival luxury companies also chasing Chinese demand for high-end handbags and clothing.
LVMH said late on Wednesday that revenues rose 16 percent to 12.5 billion euros (£10.77 billion), up 11 percent on a like-for-like basis, which strips out currency swings and the impact of acquisitions or disposals, and beating analyst forecasts.
LVMH’s shares were up 3.3 percent in early session trading, touching record highs and lifting the shares of peers such as Gucci-owner Kering, Hermes, Burberry and Moncler.
SocGen raised its rating on LVMH to “buy” from “hold”.
“We expect growth to continue to slow down in the sector in the first quarter, but LVMH is accelerating from the fourth quarter and should stand above the peer average this year, unlike in 2018,” SocGen wrote in a note.
LVMH, which owns other labels including fashion brand Christian Dior and Krug champagne, was boosted by a strong performance in its leather goods unit, while sales of spirits such as cognac improved from a quarter earlier.
Analysts said LVMH’s fashion and leather goods businesses – dubbed as “soft” fashion by stockbrokers and investors – had been particularly strong during the first quarter.
“In a nutshell, LVMH’s equity story remains intact – leadership market positions, broad-based market share gains, relatively stable earnings profile thanks to the quality of its assets, portfolio diversification and geographical balance, and great management team,” wrote RBC Capital Markets.
(Reporting by Sudip Kar-Gupta; Editing by Sarah White and Jan Harvey)