Louis Vuitton Moet Hennessy (EPA:MC), a luxury retail conglomerate, witnessed its share price rocket to all-time highs on Thursday caused by what analysts believe was a bump from Chinese markets and its fashion and leather brand.
The Parisian company reported that overall sales in Asia had risen by 14% in the first quarter of 2023.
Growth in this continent was largely driven by around a 30% jump in Chinese sales year-on-year.
Analysts at UBS noted the boost was “helped by some recovery in tourism”.
Traveller growth remains strong, albeit from a low base, due to the tough lockdown restrictions the country implemented throughout the pandemic.
Additionally, Jefferies’ analysts noted that while growth was strong in China, Cognac sales in the Asian country were weaker due to overstocking for the Chinese New Year in late January.
LVMH’s fashion and leather division continues to be the main revenue stream, with 18% growth annually to achieve sales of €10.7bln in the first three months of 2023.
This outperformed consensus and UBS estimates for a 15% rise.
“The majority of growth for Louis Vuitton was driven by product mix,” Jefferies added.
Management revealed that pricing had a significant impact on top-line growth, while volumes had a lesser contribution.
Both UBS and Jefferies continue to rate LVMH as a ‘buy’, with both targeting a share price that offers around a 15% upside to the current €870 stock value.