LVMH, the world's biggest luxury group, posted a 13 percent rise in fourth-quarter comparable sales boosted by Chinese shoppers' growing appetite for luxury goods and a steady rise in discretionary spending. LVMH, whose Louis Vuitton brand accounts for more than half of group operating profit, also proposed raising its dividend by 27 percent on the back of a record year.
LVMH Chief Executive Bernard Arnault told a news conference on Friday he had reason to be optimistic about 2011 and said he was confident the group's performance would beat last year's. The group will "continue to profit from Asian clients' infatuation with Louis Vuitton," CM-CIC analyst Merav Atlani said, adding that the Chinese had become the brand's top clientele ahead of the Japanese, Americans and Koreans.
LVMH posted a 2010 profit from recurring operations of 4.32 billion euros ($5.95 billion) on revenue of 20.3 billion, in line with forecasts in a Reuters poll. Fourth-quarter like-for-like revenue was seen up 11 percent. "Whilst this is a solid set of results, it comes after a number of beats across the European Luxury space. Given that there hasn't been as much operational gearing and not a beat, I expect the shares and sector to mark down," UBS analysts wrote.
Shares in LVMH were 1.3 percent lower at 115.20 euros by 0931 after earlier shedding more than 3 percent, the worst performer on the French blue chip CAC 40 index. Swiss luxury group Richemont, British handbag maker Mulberry and Italian leather goods group Tod's have all reported buoyant Christmas trading and expressed optimism about 2011.
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