Louis Vuitton Moet Hennessy (EPA:MC) shares rose 11% on Friday after the company issued an update that reassured not just investors but the whole luxury industry that the sharp slowdown in sales may not be as bad as predicted.
Other luxury goods companies also saw share prices lift, including Burberry Group PLC (LSE:BRBY) (+3.6%), Richemont (+5.5%) and Hermes (+3.7%).
LVMH's sales in the fourth quarter came in at almost €24 billion, representing a 10% jump and beating estimates by around 2 percentage points, the group's update revealed.
Revenues in both the US and Japan outperformed consensus, rising by 8% and 15% respectively, offsetting weaker trading throughout the rest of Asia and in Europe.
Robust growth in the group’s drinks and spirits division helped lift overall sales, with forecasts originally expecting trade in the category to fall.
Diageo PLC (LSE:DGE), the UK spirits maker, led the FTSE 100 risers on Friday following the results, with its shares having slid in recent months due to the bleak outlook surrounding the sector.
Bernard Arnault, LVMH’s boss, said: “While remaining vigilant in the current context, we enter 2024 with confidence, backed by our highly desirable brands and our agile teams.
“It promises to be an inspiring, exceptional year for us all, featuring our partnership with the Paris 2024 Olympic and Paralympic Games.”
Jefferies analysts welcomed the trading update, but kept their ‘hold’ rating for the stock, with a target price at a 2% premium to the current price.
“This year's macro/geopolitical caveat to the outlook does not come wrapped in a reassuring current trading commentary, like it was in Jan 2023,” the US bank said.
“But this delivery should be enough to steady nerves in the near term, as management reaffirmed the focus on maintaining HSD [high single digit] growth."