By Mimosa Spencer
PARIS -- LVMH Moët Hennessy Louis Vuitton SA posted a 30% jump in full-year earnings, lifted by strong sales across divisions, improved profitability and lower charges.
The French luxury-goods company, the maker of Dior perfumes, Veuve Clicquot champagne and TAG Heuer watches, said net profit rose to €1.88 billion ($2.45 billion) in 2006 from €1.44 billion a year earlier. The 2005 results were weighed down by the closure of the company's Samaritaine department store.
Revenue rose 10% to €15.31 billion, the highest annual level ever, from €13.91 billion.
Revenue grew at double-digit rates in all regions except Japan, where it rose 4%. Japan is considered a tough region for luxury-goods companies partly because of its weak currency. Chairman and Chief Executive Bernard Arnault sought to reassure analysts at a press conference, saying he expected the yen to strengthen in 2007.
Sales at the company's fashion-and-leather-goods division, the largest contributor to overall sales with brands such as Louis Vuitton, rose 9%, or 11% at constant exchange rates, to €5.22 billion. Sales were also strong at the watches unit, where revenue rose 26% to €737 million.
Wines-and-spirits revenue increased 13% to €2.99 billion as more consumers splurged on champagne. Moet & Chandon, the flagship label, saw "strong development" in central Europe and China, LVMH said.
"In a difficult currency environment at the beginning of this year, we will rely on the strength of our growth model, the exceptional innovation of our brands and the talent of our teams to make 2007 another year of strong growth," Mr. Arnault said.
Christophe Navarre , the head of LVMH's wines-and-spirits division, said he viewed the group's future relations with spirits-distributor partner Diageo /zigman2/quotes/208129584/composite DEO +0.33% PLC confidently.
The comments follow market speculation that U.K.-based Diageo might pull out of its joint venture with LVMH in order to make a bid for rival spirits maker Remy Cointreau SA.
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