PARIS, France — LVMH Moet Hennessy Louis Vuitton SA, the world’s largest luxury-goods maker, and Gucci owner Kering SA reported accelerating sales growth as the industry rebounded from a weak start to the year.
LVMH, the owner of Louis Vuitton and Christian Dior, said second-quarter organic revenue advanced 9 percent, more than the first-quarter’s 7 percent gain. Luxury sales at Kering rose 9.4 percent on a comparable basis, exceeding the previous quarter’s 6.4 percent increase, the Paris-based company said today.
The stronger sales performances provided some relief for luxury investors after a stuttering start to the year at both companies. First-quarter revenue growth at Gucci and LVMH’s fashion and leather-goods unit was the weakest in more than three years, hurt partly by weaker Chinese consumption. Both companies today expressed confidence in the second-half outlook.
“I expect trading updates to continue to improve in the second half” as the basis of comparison gets easier and confidence among rich Chinese consumers strengthens, Luca Solca, an analyst at BNP Paribas, said by e-mail.
LVMH, which this month agreed to pay 2 billion euros ($3.1 billion) for 80 percent of Italian clothier Loro Piana SpA, said first-half sales at its fashion and leather-goods unit rose 5 percent, excluding acquisitions, disposals and currency shifts. That was an improvement on the first-quarter’s 3 percent growth.
Second-quarter sales at Kering, formerly known as PPR, were driven by Bottega Veneta. The brand had growth of 17 percent on a comparable basis, about double the pace of the previous three months. That topped Gucci’s 4.1 percent advance, which was little changed from the first-quarter’s 4 percent increase and below the 4.9 percent median estimate of 16 analysts.
Gucci’s growth was “a touch below expectations,” while the company’s other brands exceeded estimates, Solca said.
Hermes International SCA, in which LVMH has a stake, this month reported a 16 percent increase in quarterly revenue, excluding currency swings, as sales of its Kelly handbags and other goods surged in Asia and the Americas.
First-half profit at Kering beat estimates as the luxury unit’s growth compensated for lower sales at Puma SE, the sporting-goods company in which it owns a majority stake.
So-called recurring operating income advanced 2.3 percent to 843 million euros in the six months ended June 30, the company said. Analysts predicted 824 million euros, the median of 16 estimates surveyed by Bloomberg.
“Trends recorded in the first six months of 2013 should continue in the second half,” Kering said in the statement. “In this context, the group maintains its goal of improving its operating and financial performances in the full year.”
LVMH’s first-half profit from recurring operations climbed 2 percent to 2.71 billion euros, the Paris-based company said today. Analysts predicted 2.76 billion euros, according to the average estimate compiled by Bloomberg.
First-half sales advanced 5.6 percent to 13.7 billion euros, or 8 percent excluding currency shifts and acquisitions.
“It is with confidence that we approach the second half of the year,” Chairman and Chief Executive Officer Bernard Arnault said in the statement.
By: Andrew Roberts; Editor: Paul Jarvis, Robin Ajello