Strong sales in Asia have helped LVMH and its fashionable companies exceed full-year profit forecast for 2011.
The luxury conglomerate’s net income rose a modest 1% last year to 3.07 billion euros, exceeding estimates of 3.06 billion euros. It’s a small win, but a significant one in the light of Europe’s uncertain economy. It’s also important to note that LVMH’s 2010 were inflated by a 745 million euro profit from its share in Hermes. Without that boost, the 2011 net profit would have jumped b a whopping 34%. It may be more telling that total sales rose by 16% to 23.7 billion euros. Again that was better than the 23.4 million euro increase forecasted.
LVMH’s agreement with Bulgari was one of its most significant business moves of the year. Bulgari has flourished under LVMH’s leadership, with a jump in its fourth quarter revenue of 20%. Its Louis Vuitton brand also enjoyed record results and Fendi continued to perform well, particularly with its Peek-a-boo line. Donna Karan enjoyed significant growth in the United States, while Celine, Loewe, and Givenchy also showed “remarkable momentum.”
LVMH said it believes the fashion house can continue to grow this year. The firm’s chairman Bernard Arnault called 2011 “another great vintage” for LVMH and its companies. This year the luxury goods giant hopes to strengthen its position as a global leader by relying on its “sound, long-term strategy.” Some might call that playing it safe, but with results like this perhaps it’s merely being smart.
[Image Source: Nicogenin/Wikipedia Commons]
