PARIS, France — LVMH Moet Hennessy Louis Vuitton SA, the world’s largest luxury-goods maker, reported a 2 percent gain in annual profit as growth in fashion and leather-goods sales rebounded in the fourth quarter.
Profit from recurring operations climbed to 6.02 billion euros ($8.2 billion), Paris-based LVMH said today in a statement, matching the median of 19 analysts’ estimates compiled by Bloomberg. Organic fashion and leather-goods sales rose 5 percent in 2013, accelerating from a 4 percent gain in the first nine months of the year.
Louis Vuitton is introducing more expensive products and opening fewer stores as LVMH’s biggest and most profitable brand seeks to move upscale amid softening demand in Europe and Asia. The transition is going to take some time, Chief Financial Officer Jean-Jacques Guiony has said. Industry sales, which rose at the weakest pace in four years in 2013, according to Bain & Co., could remain under pressure for at least another six months, suitmaker Ermenegildo Zegna SpA has predicted.
“Despite an uncertain economic environment in Europe, LVMH is well-equipped to continue its growth momentum across all business groups in 2014,” the company said in the statement.
Total 2013 revenue advanced to 29.15 billion euros, LVMH said. Analysts predicted 29.4 billion euros. Sales rose 8 percent on an organic basis, matching estimates.
LVMH is boosting investment in some of its smaller fashion brands and buying stakes in others to help offset slowing growth at Vuitton. It’s also shuffling Vuitton’s management, appointing Delphine Arnault as executive vice president and Nicolas Ghesquière as artistic director last year.
“Vuitton is still some way off showing any signs of material improvement given the size of the brand,” Allegra Perry, an analyst at Cantor Fitzgerald, said in a note this week. “While we believe initiatives should boost brand equity over the longer term, we expect this to impact growth in the near term and limit upside in the shares.”
LVMH fell 0.7 percent to 122.5 euros in Paris trading today. The results were released after markets closed.
By Andrew Roberts; Editors: Paul Jarvis, David Riser