LVMH fashion and leather first quarter sales beat forecasts

LVMH, the world's biggest luxury group, said its flagship Louis Vuitton brand had an "excellent" start to the year and its fashion and leather division posted a higher than expected rise in like-for-like first-quarter sales.

The group, which also owns fashion brands Dior and Celine, said comparable sales at its fashion and leather division rose 9 percent in the three months to March 31, beating analysts' expectations of a 5-7 percent rise.

The division is the biggest and most closely watched as Louis Vuitton accounts for more than half of group operating profits. The unit saw like-for-like sales growth improve in the fourth quarter to 7 percent from 3 percent in the preceding three months.

But several analysts had expected momentum to drop somewhat in the early part of the year, partly due to enduring tough trading in China, slower growth in the United States and a drop in spending by Russian tourists.

LVMH, which also owns Hennessy cognac, blamed its like-for-like 3 percent drop in wines and spirits' revenues on retailers' low purchases in China.

The group said its Sephora beauty retail chain continued to gain market share and duty-free shops enjoyed strong trading in Asia and together, the two businesses produced the group's highest sales growth, or 10 percent on a comparative basis.

Overall, LVMH's first-quarter revenues rose 6 percent, reaching 7.2 billion euros, slightly above expectations of 7.17 billion euros, based on a Thomson Reuters I/B/E/S poll.

"The performance of the fashion and leather is much better than expected but that of the wines and spirits is also worse than expected," said luxury goods analyst Julian Easthope at Barclays.

Much of the focus during LVMH's conference call on Thursday will be on obtaining details about Louis Vuitton's performance during the quarter, analysts said.

LVMH did not provide any financial forecasts for the current year.