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Buyer Community> Trade Intelligence> Apparel & Fashion> UPDATE 2-LVMH says January "not bad," no 2009 outlook
Source: Reuters

UPDATE 2-LVMH says January "not bad," no 2009 outlook

Published: 14 Apr 2009 08:28:11 PST

* LVMH 2008 operating profit 3.63 bln euros ($4.7 billion)

* Says fourth-quarter sales growth about flat

* January "not a bad month", gives no 2009 outlook

* Keeps dividend unchanged at 1.60 euro a share

(Adds details, management quotes)

By Astrid Wendlandt

PARIS, Feb 5 (Reuters) - LVMH (LVMH.PA), the world's biggest luxury goods group, gave no outlook for 2009 and said fourth-quarter underlying revenue growth was "about flat" as it posted full-year profit broadly in line with forecasts.

LVMH Chief Executive Bernard Arnault said on Thursday January was "not a bad month" with sales rising, but would not give figures.

The group behind Veuve Clicquot champagne, Marc Jacobs and Celine fashion houses and Tag Heuer watches made an operating profit of 3.63 billion euros ($4.7 billion) in 2008, up from 3.56 billion in 2007, on sales of 17.19 billion euros, up 4 percent.

The outcome compared with average expectations for operating profit of 3.62 billion euros on sales of 17.19 billion, according to a Reuters poll of nine analysts.

Like-for-like revenue last year rose 7 percent, slightly higher than the 6 percent increase expected by analysts.

Arnault said like-for-like sales during the fourth quarter were about flat but again did not give details. Analysts expected a 3 percent decline.

"LVMH's objective in 2009 is to continue to increase its leadership of the worldwide luxury goods market," the group said in a statement.

The Paris-based group made a net profit of 2.03 billion euros in 2008, compared with average expectations of 2.09 billion based on the Reuters poll.

LMVH proposed to keep the dividend at 1.60 euros a share for 2008.


The group said it planned to continue cutting costs at its jewellery and watch divisions as their profit from recurring operations dropped 16 percent last year and like-for-like sales fell 2 percent.

"The market abruptly slowed down during the fourth quarter," said Philippe Pascal, head of watch and jewellery. "Some purchases of high-end jewellery were postponed."

Arnault declined to give details about job cuts at the division.

Last month, U.S. jeweller Tiffany&Co (TIF.N) issued its second profit warning in three months, while Richemont (CFR.VX) posted disappointing sales for the last quarter of 2008.

Meanwhile, Swiss watch group Swatch (UHR.VX) also missed revenue forecasts and warned of a challenging first quarter.

Analysts expect Swiss watch exports to fall 8 percent in 2009, the worst decline in more than two decades.

LVMH added in investor slides that turnover generated by the Louis Vuitton leather goods and fashion brand had risen by a double-digit figure in 2008 but did not give details.

Revenue from the group's fashion and leather goods businesses combined rose 10 percent on a like-for-like basis and 7 percent on a reported basis, while profit from recurring operations at the unit rose 5 percent to 1.93 billion euros.

"Taking into account the limited visibility on the depth and duration of the global economic and financial crisis, LVMH continues to apply a strong financial discipline in managing all of its businesses," the group said.

Profit from recurring operations from the wine and spirits unit remained flat during 2008 but profit from perfume and cosmetics rose 13 percent. (Editing by James Regan and David Holmes) ($1=.7806 Euro)

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