The luxury titan made that a caveat to his bullish outlook after reporting that net income at LVMH Moët Hennessy Louis Vuitton vaulted 30 percent in 2003 to $875.6 million, or 723 million euros, and that sales in January and February gained 7 percent in organic terms.
“The results are very promising: 2004 will be another excellent year for LVMH. The strong start to the year has made me even more confident,” Arnault told analysts here Wednesday. “But if Mr. Bush decides to move into another part of the world, things could change.”
Barring that, or some unforeseen catastrophe like the killer pneumonia SARS, which along with the Iraq war ravaged the sector in the first half of last year, Arnault said LVMH should report “tangible growth” in operating income this year, the same goal it set for itself last year.
Speaking in a rapid-fire manner — perhaps so as not to be late for the Christian Dior runway show later on Wednesday — Arnault boasted that LVMH gained market share in all of its businesses, highlighting “spectacular” growth in wines and spirits and record margins in excess of 45 percent at Louis Vuitton, the cash cow of the group that pulls in some two-thirds of operating profits.
In fact, Arnault said Vuitton has “the biggest potential” of all of its brands, citing double-digit organic growth in January and February as a good omen for this year. Later in the presentation, Vuitton chief executive Yves Carcelle said the brand posted record sales in December, with sales in dollars catapulting more than 50 percent in the fourth quarter in the U.S.
Perhaps as a reward for the stellar performance of the Vuitton brand, creative director Marc Jacobs might be getting his very public wish to have LVMH speed up the growth of his own label. During his presentation, Carcelle highlighted Jacobs as one of the group’s small brands with high potential that would receive “accentuated” development in 2004.
He didn’t give specifics, but noted that Jacobs, whose volume was a paltry $2 million when he joined LVMH in 1997, reached $115.1 million, or 95 million euros, last year. The other small brands to get priority are Pucci and Berluti. Pucci’s volume has risen 10-fold and Berluti’s by 15 times since their acquisitions in 2000 and 1993, respectively.