LVMH Posts Record Annual Sales of $15.5 Billion

LVMH, the largest luxury goods group in the world, reported a 6 percent increase in sales last year to a record high, boosted by what it described as an "exceptional" year-end at flagship Louis Vuitton, and is forecasting a 10 percent jump in operating profit for 2004.

The company posted full-year sales of 12.631 billion euros ($16.52 billion) compared with 11.962 billion euros in 2003.

LVMH said that on an underlying basis, stripping out acquisitions, divestments and the effects of currency movements, 2004 sales grew 11 percent.

Its watches and jewelry division was one of its two weakest performing sectors, however, along with perfumes and cosmetics, with sales edging down to 497 million euros from 502 million euros a year earlier.

On a brighter note, though, the company said its TAG Heuer brand had an “exceptional year”, enjoying a warm reception on the market for innovative designs for the Formula 1 and Carrera watches. Other notable performers were the new ladies’ watch Open Star by Zenith, and the Chiffre Rouge watch developed by Hedi Slimane for Christian Dior, as well as the Class One rings by Chaumet.

Growth in turnover at Louis Vuitton was in the double-digits over 2004, and the brand had enjoyed an "exceptional" end of the year, LVMH said.

Industry analysts had expected to see LVMH results suffer from foreign exchange movements. The firm makes most of its goods in the euro zone but exports to Asia and the United States, making it vulnerable to euro strength against the U.S. and Japanese currencies.

"These performances are the more remarkable in that they were achieved in a punishing foreign-exchange environment, with the dollar and yen continuing their fall against the European currency," LVMH said. It added that it expected the economic and monetary environment to remain difficult.