LVMH Full-Year Profit Jumps 30%

LVMH Moet Hennessy Louis Vuitton, the Paris-based luxury goods empire, said Wednesday its wines & spirits division led a 30 percent increase in net profit last year, as champagne drinkers moved upmarket to more expensive brands of bubbly.

The maker of Louis Vuitton bags, Hennessy cognac and TAG Heuer watches -- among other prestigious marques -- posted net profit of 1.88 billion euros ($2.46 billion) for 2006, compared with 1.44 billion euros the previous year. The figure beat the 1.85 billion euros ($2.42 billion) forecast by analysts in a Dow Jones Newswires poll.

Revenue jumped 10% to 15.31 billion euros ($20.02 billion) from 13.91 billion euros. The group did not break out quarterly figures for profit or sales.

Chairman and CEO Bernard Arnault said the results "confirmed the strong potential of our high-growth, rising-star brands and the group's leading position in emerging markets."

Wines & spirits revenue increased 13% to 2.99 billion euros ($3.92 billion), the strongest growth among the four main divisions, as more consumers splashed out on top champagne brands like Dom Perignon and Ruinart, and overall volumes increased. Moet & Chandon, the flagship label, saw "strong development" in central Europe and China, the LVMH statement said, without giving details.

Both fashion & leather goods and perfumes & cosmetics posted 11% revenue growth -- contributing 5.22 billion euros ($6.83 billion) and 2.52 billion euros ($3.3 billion) respectively -- with star brand Louis Vuitton contributing an unspecified "double-digit" expansion.

At perfumes & cosmetics, profit from recurring operations jumped 28%, while at watches & jewelry, the smallest division, profit almost quadrupled to 80 million euros ($105 million) on a 26% increase in revenue to 737 million euros ($964 million).

The selective retailing division -- which includes the DFS and Sephora chains -- posted a 15% jump in profit to 400 million euros ($523 million) on a 7% increase in revenue to 3.89 billion euros ($5.09 billion). Elsewhere, earnings increased broadly in step with revenue.

LVMH promised "significant growth" in 2007 revenue and profits, raising its recommended dividend to 1.40 euros ($1.83), an increase of 22% on last year.

Shares of LVMH Moet Hennessy Louis Vuitton rose 1% to close at 82.85 euros ($108.38) in Paris shortly before the results announcement.