PARIS (Reuters) – LVMH shares rose on Wednesday after first-quarter sales data from the world’s largest luxury group offered a measure of reassurance to investors worried about the sector’s prospects, particularly in China.
LVMH shares rose about 2% in early trading sessions.
On Tuesday, LVMH reported that sales for the quarter ended in March rose 3% on an organic basis to 20.69 billion euros ($22 billion), matching analysts’ expectations.
“The market environment is challenging, especially in China, and LVMH has managed to manage it in line with expectations,” said Mario Ortelli, of luxury consultancy Ortelli & Co.
LVMH, Europe’s second-largest listed company valued at nearly 400 billion euros, is the first luxury goods maker to report quarterly sales at a time of growing concern over slowing growth in China’s second-largest economy.
Owner of Gucci Dry (EPA:) issued a surprise warning last month that first-quarter sales would slump 10%, with sharp declines in Asia, casting uncertainty over the industry’s outlook.
LVMH, owner of brands such as Louis Vuitton, Tiffany&Co (NYSE:). and Bulgari, said sales in Asia, excluding Japan, fell 6%, but purchases by Chinese shoppers globally grew 10%.
“The much-discussed division (Fashion & Leather Goods) also met investors at the bar, +2% in line with our and the market’s expectations, perhaps enough to reassure the most cautious investors,” JPMorgan analysts said.
The division, which includes Louis Vuitton and Dior, has been closely watched for signs that rising prices could curb demand for high-end products such as handbags that cost thousands of dollars.
Hermes shares rose 1% on the back of LVMH results.
($1 = 0.9414 euros)