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    BRBY   GB0031743007

BURBERRY GROUP PLC

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LVMH shares hit record high as China demand boosts luxury group

04/11/2019 | 12:01pm EST
FILE PHOTO: Woman with a Louis Vuitton-branded shopping bag looks towards a branch store in Vienna

PARIS (Reuters) - LVMH shares hit a record high on Thursday and buoyed those of rivals after the Louis Vuitton owner posted strong first-quarter sales and said that demand for its handbags and high-end fashion had picked up in mainland China.

The group, which owns other labels including Christian Dior and Krug champagne, is setting a high bar for rivals chasing the same clientele, though not all are benefiting equally as Chinese spending shifts from overseas shopping capitals to home.

LVMH's solid momentum, however, was still sufficient to lift stocks across the sector despite fears of a souring Chinese economy.

The French group's were up 4.3 percent in afternoon trade after touching a record earlier in the day, helping to boost peers such as Gucci-owner Kering, Hermes, Burberry and Moncler.

LVMH had reported forecast-beating results late on Wednesday. First-quarter revenue rose 16 percent to 12.5 billion euros ($14.10 billion), up 11 percent on a like-for-like basis, which strips out currency swings and the impact of acquisitions or disposals.

Generally slower growth is expected when LVMH's rivals report first-quarter numbers and the group "should stand above the peer average this year", SocGen analysts wrote as the bank raised its rating on the company to "buy" from "hold".

LVMH's bullish comments about the appeal of its brands to Chinese consumers further buoyed its shares during a conference call with analysts on Thursday.

"With the Chinese, the business is really moving from strength to strength," Financial Director Jean-Jacques Guiony said of LVMH's main profit driver Louis Vuitton, adding that it had also sold well with Japanese and U.S. clients.

Guiony confirmed that Chinese customers - who still mainly buy luxury items on overseas trips and who account for more than a third of the sector's sales - were gradually spending more on home turf, encouraged in part by government efforts to fuel consumption by cutting VAT or import duties.

Shopping destinations within close reach, such as Hong Kong or Macau, have taken the largest hit from that trend, he added, while Chinese spending in Europe had remained strong despite recurrent street protests in France.

"There is stability in Europe, increasing demand in China and a slowdown outside China in rest of Asia," Guiony said.

(Reporting by Sudip Kar-Gupta and Sarah White; Editing by Jan Harvey and David Goodman)

By Sudip Kar-Gupta and Sarah White


ę Reuters 2019
Stocks mentioned in the article
ChangeLast1st jan.
BURBERRY GROUP PLC 2.24% 1805 Delayed Quote.-1.23%
E.ON SE 1.82% 10.95 Delayed Quote.18.67%
HERMÈS INTERNATIONAL -1.49% 1583 Real-time Quote.82.64%
KERING 0.47% 687.2 Real-time Quote.15.07%
LVMH MOËT HENNESSY LOUIS VUITTON SE -0.04% 684.8 Real-time Quote.34.08%
MONCLER S.P.A. 1.35% 66.02 Delayed Quote.29.92%
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Analyst Recommendations on BURBERRY GROUP PLC
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Financials
Sales 2022 2 778 M 3 683 M 3 683 M
Net income 2022 354 M 469 M 469 M
Net cash 2022 1 013 M 1 344 M 1 344 M
P/E ratio 2022 20,4x
Yield 2022 2,65%
Capitalization 7 136 M 9 436 M 9 461 M
EV / Sales 2022 2,20x
EV / Sales 2023 2,01x
Nbr of Employees 9 373
Free-Float 99,5%
Chart BURBERRY GROUP PLC
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Burberry Group plc Technical Analysis Chart | BRBY | GB0031743007 | MarketScreener
Technical analysis trends BURBERRY GROUP PLC
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TrendsBearishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 23
Last Close Price 1 765,50 GBX
Average target price 2 119,35 GBX
Spread / Average Target 20,0%
EPS Revisions
Managers and Directors
Marco Gobbetti Chief Executive Officer & Director
Julie Brown Director, Chief Operating & Financial Officer
Gerard Martin Murphy Chairman
Mark McClennon Chief Information Officer
Matthew David Key Independent Non-Executive Director
Sector and Competitors
1st jan.Capi. (M$)
BURBERRY GROUP PLC-1.23%9 436
INDITEX6.95%97 924
KERING15.07%95 793
FAST RETAILING CO., LTD.-27.92%60 212
ROSS STORES, INC.-10.28%39 158
HENNES & MAURITZ AB-4.03%28 969