Drinks boosts performance of LVMH

LVMH, the largest manufacturer of luxury goods in the world, unveiled yesterday a recipe for the third quarter that exceeded analysts ' estimates and was stimulated by growth in Europe, United States and Japan.
Revenues increased 7% in organic terms, according to the Paris-based company and manufacturer of TAG Heuer Watches, in a statement. The average expectation of 18 analysts consulted by Bloomberg was a growth of 5.4%. The unit gains of wines and distillates offset smaller-than-anticipated growth in the area of fashion and leather goods.
The numbers are an incentive for the luxury goods sector, at a time when the fall of the stock market and the exchange rate devaluation in China increases the challenges that companies face in the world's second-largest economy. Sales of leather goods, cognacs and watches fell in the country after a Government crunch to extravagance, but Europe and Japan took advantage of the Chinese consumer spending outside of your country. The jeweler Bulgari, controlled by LVMH, said last month that travel purchases are being record this year.
"In an uncertain economic and financial scenario, LVMH will continue focusing its strategy on innovation and geographic expansion directed toward the most promising markets," said the Group of luxury goods.
The company's shares rose 0.5 percent on the Paris stock exchange yesterday, to € 166,5. Quarterly sales were announced after the close of markets. Total revenue in the quarter increased by 16% to € 8,58 billion. Analysts predicted € 8.53 billion.
The unit of wines and distillates was responsible for the biggest surprise, showing a 16 percent increase in organic revenue, as compared to 5% growth estimate of analysts. Hennessy Cognac sales were helped by a reaction in China, according to the company. Sales of fashion items and leather had expansion of 3%, less than the average estimate of analysts, which was 6%.