Operating profits for the full year jumped 32 percent to 74 million euros, or $101.4 million.
"The year was excellent, in spite of the exchange rates," said Sidney Toledano, Dior's president and chief executive officer. "We are confident."
In an interview, Toledano credited Dior's 60th anniversary celebrations — which included a blockbuster couture event in Versailles last July — and an ongoing upscaling effort for boosting the brand's fortunes.
"We're focusing on more expensive products, meaning higher prices in all product categories," Toledano said.
He also cited a return to Dior's roots, reflected in "sophisticated" and "elegant" designs by designer John Galliano. The fall 2007 collection posted "very strong double-digit" growth at retail and the cruise collection has also been "a big success," Toledano said.
Galliano plans to return to New York on May 12 to present his next cruise collection. The location has yet to be determined.
In accessories, the Lady Dior, first introduced in 1995, ranked as the firm's number-one selling handbag line over the holidays, with new soft versions particularly popular. Toledano also cited strong men's wear sales in December, when stores received first deliveries of designs by Dior Homme's new creative director, Kris Van Assche.
In recent years, Dior has phased out logo lines and other "access" price products to focus on high luxury, including items such as crocodile bags and 50,000-euro, or $72,500, Christal watches. "We'll continue this strategy in 2008," Toledano said.
Discussing 2007 results, Toledano cited strong momentum in emerging markets such as China, Russia and the Middle East. "Hong Kong has been booming," he noted. "And in Europe, the last part of the year has been doing really well."
By contrast, Toledano characterized the American market as "OK" and said Dior would bolster the business there by renovating the New York flagship, starting this spring, along with several other units. "Our objective is to get market share and position the brand at the highest level," he said.