FRANCE. Analysts expect DFS Group parent company LVMH Moët Hennessy Louis Vuitton to post higher-than-expected first-half sales figures this week amid a strong recovery in the international travel and luxury markets.
Sales are expected to be between €5.5 billion (US$6.9 billion) and €5.6 billion (US$6.9 billion), up from €5.2 billion (US$6.5 billion) for the same period last year, according to a poll conducted by AFX International Focus. A similar Bloomberg survey suggested a +10% rise in second-quarter sales is likely.
“The drivers of growth have definitely been Asia and the US,” Clariden Bank of Zurich’s Scilla Huang Sun told Bloomberg. “Tourism is a big part of that and one of the questions is whether travelers are also starting to come back to Europe.”
Improving Asian tourist traffic and spending and increased luxury buying by US consumers is spurring the luxury fashion and accessories business, Bloomberg said.
While the Louis Vuitton brand has been the locomotive of the group’s performance, LVMH’s travel retail arm DFS Group is also bouncing back well. The recent, belated but sharp improvement in Japanese outbound traffic is helping as is the continued surge in travel by the mainland Chinese, particularly to Hong Kong. A low US Dollar against the Japanese Yen (currently Â¥108.78 to the Dollar) is another major plus factor.
Travel has “improved over the past few months, in particular … (the flow) of Chinese travelers to Hong Kong and Japanese travelers to Hawaii,” Melanie Flouquet, an analyst at JP Morgan Securities in London, said in a note to clients. “We expect LVMH to report very strong second-quarter sales.”
Besides its ownership of Louis Vuitton and DFS Group, LVMH owns a glittering portfolio of upscale brands including Moët & Chandon, Dom Pérignon, TAG Heuer, Givenchy, Parfums Christian Dior and perfumery chain Sephora. Louis Vuitton is launching its first jewellery line in September, following the roll-out of its first watches in 2002. Pertinently, the first three jewellery launches will be in New York, Tokyo and Shanghai.
MORE STORIES ON LVMH
LVMH sets the bar high for DFS divestment – 13/05/04
DFS shines as LVMH posts strong organic growth – 08/04/04
DFS set to star as LVMH prepares to deliver first quarter results – 07/04/04
