LVMH shares surge on Louis Vuitton sales in Asia

LVMH shares gained the most in a year after results beat estimates on demand for Louis Vuitton bags in Japan and Europe, providing some relief for a beleaguered luxury-goods industry.

The stock rose 6.5% at one stage in Paris yesterday, and earlier surged to 7.4%, the biggest intraday gain since early last year.

The stock had declined 15% in six months, weighed down by slowing demand in Asia.

A better-than-expected fourth-quarter performance in fashion and leather-goods provided a highlight for the world’s largest maker of luxury products, which benefits from a broad spread of goods covering Celine dresses, Moet and Chandon champagne, and Christian Dior perfumes.

That compensated for a slowdown in the watches and jewellery unit, where sales were hurt by a slump in Asian demand that caused Swiss rival Swatch Group to report earnings that missed estimates.

“When the environment gets tough, the highest-quality companies like LVMH tend to stand out,” said Rogerio Fujimori, analyst at RBC Capital Markets.

LVMH chief executive Bernard Arnault expressed confidence that the Paris-based company can continue to outperform its luxury sector peers, despite an “uncertain” business climate.

Profit advanced 16% last year to €6.61 billion, while fourth quarter organic revenue increased 5%.

— Bloomberg