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By Astrid Wendlandt
PARIS Jan 31 LVMH shares jumped on
Friday after the world's biggest luxury group said fashion and
leather revenue accelerated in late 2013 and predicted cognac
sales in China would improve in the current quarter.
Bouncing from a seven-month low set the previous session,
LVMH shares rose as much as 7 percent, dragging up rivals such
as Richemont, Burberry and Kering
which gained between 2 and 4 percent.
"Market fears of a weakening quarter-on-quarter (at LVMH)
were alleviated and the diversity of the group's portfolio
continues to protect against macro (economic) headwinds," Nomura
analysts said in a note.
Sales growth at LVMH's fashion and leather good unit, its
biggest business, accelerated to 7 percent in the quarter to
Dec. 31 from 3 percent in the previous three months, beating
analysts' expectations of between 4 and 5 percent.
The owner of Hennessy cognac and fashion brand Dior said
late on Thursday that the profitability of Louis Vuitton, LVMH's
main cash cow, remained unchanged in 2013 and that its upmarket
When LVMH published its mid-year figures in July, there was
concern about Louis Vuitton losing momentum after having enjoyed
stellar growth for years.
LVMH also said it expected cognac sales to end-customers or
consumers in China to be "positive" in the first quarter, after
having joined the ranks of rivals Diageo, Pernod Ricard
and Remy Cointreau, which suffered from
excessive stock and lower demand for premium spirits in China.
LVMH shares, which lost 4.5 percent last year and had fallen
7.6 percent so far this month, were trading 5.8 percent higher
at 129.60 euros by 0835 GMT, the top gainer in a 0.1 percent
weaker French CAC 40 blue-chip index.
LVMH is trading on about 16 times this year's earnings,
which puts it roughly in line with the sector average but at a
discount to smaller, more versatile groups such as Prada
and Ferragamo, which trade on 18.5 and 23.5
"We view LVMH's competitive position as very solid,"
Morningstar analysts said in a note. "We believe the market is
understating the long-term potential for LVMH's large and
diverse group of luxury brands."
Richemont said earlier this month that the pace of sales
growth remained steady in the last three months of 2013, rising
9 percent at constant exchange rates as demand for its IWC
watches, Cartier jewellery and other brands in its retail
outlets more than offset a still subdued wholesale business.
Demand for coats and large leather bags helped Burberry
top Christmas sales forecasts, meanwhile, the British
luxury brand said earlier this month.
Gucci owner Kering is due to publish 2013 results on Feb.
(Editing by James Regan and David Holmes)