Rich people really are shopping again! Today LVMH reported an 11 percent revenue increase for the fourth quarter, thanks to increased demand for Champagne, watches, and jewelry — all categories hit hardest in the luxury-goods industry in the downturn. Sales for the three months ending March 31 totaled $6.2 billion versus $5.26 billion in the same period last year. With a comparable structure and constant exchange rates, that's an increase of 13 percent. Wall Street is just tickled by the numbers:
Analysts said the report showed a strong start to the year. "This set of results confirms my expectation of a fast-rebounding luxury market, supported by exceptional strength in emerging markets and a wholesale rebound," said Bernstein analyst Luca Solca.
Fashion and leather-goods sales increased 8 percent (or 10 percent organically). This division is home to Louis Vuitton, making it one of the recession's most resilient brands.
While LVMH's watch and jewelry sales fell 13 percent in 2009, they posted a 33 percent gain for the first quarter. As the industry has shown us, every sexy man needs a great watch.
However, LVMH isn't taking the numbers for granted. In light of the "uncertainty of the strength of the economic recovery," the company said, it plans to be very strict with costs and investments. So as you see, it's not all about spending just yet.