* LVMH Q1 sales 6.947 bln eur vs poll avg 6.904 bln
* Q1 growth at fashion and leather unit 3 pct vs
expectations of 5 pct
* Says economic environment remains uncertain in Europe
(Adds details, analyst comment)
By Astrid Wendlandt
PARIS, April 15 LVMH reported the
lowest quarterly sales growth since 2009 on Monday at its
fashion and leather division dominated by Louis Vuitton, the
world's biggest luxury brand by sales.
The world No.1 luxury goods group, which also owns Hennessy
cognac and champagne leader Moet & Chandon, achieved a revenue
rise of 3 percent at its fashion and leather unit in the first
quarter, below the 5 percent expected on average by analysts.
The last time sales growth at the division was that low was
four years ago after the collapse of Lehman Brothers and as the
U.S. financial crisis hit luxury goods spending.
The unit accounts for the bulk of LVMH's profits.
"This will be the focus area for everybody," one
London-based analyst said about the division, declining to be
Other analysts noted, however, that the comparative basis
for the division was high. Sales growth last year reached 12
percent in the first quarter, 8 percent in the second quarter
and 5 percent in the third and fourth quarters.
Also, the group said at the time of its annual results in
February that it planned to slow down Louis Vuitton's global
expansion to preserve the brand's exclusive image and move its
products more upmarket.
While the move was seen resulting in slower growth in the
short term to benefit the brand longer term, some analysts still
expected the volume slowdown to have been compensated by an 8
percent price increase in Europe last autumn and a 12 percent
hike in Japan in February.
Overall, LVMH's first-quarter sales rose 7 percent on a
like-for-like basis to 6.947 billion euros ($9.09 billion),
slightly above the average estimate of 6.904 billion in a
Reuters analyst poll.
The group said it had strong growth in Asia and the United
States but noted the economic environment remained challenging
and uncertain in Europe. The quarterly performance was in line
with previous trends seen in the second half of 2012, it added.
"For me, the sales growth of the wines and spirits division
is a little bit better than expected," said Marc Willaume, an
analyst at Raymond James in Paris. Organic growth at the unit
was 7 percent.
The group's travel retail unit, DFS, also benefited from
slightly higher-than-expected comparable sales growth, coming in
at 17 percent, while many analysts had forecast a 15 percent
"DFS recorded an excellent performance driven by the
continued growth in Asian tourism despite a decline in
expenditure from Japanese tourists resulting from the weaker
Yen," LVMH said in a statement.
LVMH is due to hold a conference call for analysts and
investors on Tuesday at 1300 GMT.
($1 = 0.7643 euros)
(Editing by James Regan)