Paris - LVMH Moet Hennessy Louis Vuitton, the biggest maker of luxury goods, said yesterday second-half profit rose 19 percent, led by the leather and fashion unit. Sales growth was slowing this year, the French company said.
Net income rose to e395 million (R2,6 billion), or e0,81 a share, in the half from e333 million, or e0,69 , a year earlier, according to Bloomberg calculations. Sales rose 13 percent in January and February after a 36 percent gain for all of last year.
"These numbers are disappointing," said Scilla Huang Sun, who manages a luxury goods fund at Clariden Bank. "Most companies expect sales growth to slow down, but this is quite marked."
LVMH said a string of takeovers last year should bring growth and help weather an economic slowdown in the US. The firm bought Miami Cruiseline and the Donna Karan fashion brand, and invested in Pucci and Fendi among the 16 transactions made last year, Bloomberg data shows.
Shares of LVMH fell as much as e2,3, or 3,6 percent, to e61,9. The stock is down 15 percent in the past year, in line with the CAC index of leading French stocks.
The company said it aimed to increase both sales and operating profit by at least 10 percent in 2001. That is slower than last year's 35 percent growth in sales and 27 percent gain in operating profit.
LVMH's sales gains in the final months of 2000 were either in line with, or ahead of, rivals.
The firm said on January 23 that revenue rose 31 percent in the fourth quarter, when Financiere Richemont posted a gain of 21 percent.
In December alone, LVMH's sales rose 30 percent, the same as those of Gucci Group's namesake brand. Full-year net income at LVMH fell short of expectations, rising to e722 million from e693 million. Analysts forecast net income of between e759 million and e887 million.
The results for the second half were calculated by subtracting first-half from full-year profit.
Sales rose to e11,6 billion and operating profit reached e1,96 billion, led by the leather goods and fashion division, where profit gained 41 percent.