On Tuesday, Offshore portfolio holding Moët Hennessy Louis Vuitton (LVMH) rose +5% after reporting an outstanding first quarter that pointed to both the business's fundamental resilience as well as a broader macro recovery.
The luxury conglomerate saw organic outperformance in each of its primary business lines, particularly in its two highest margin businesses - Fashion & Leather Goods and Wine & Spirits.
These two segments both saw organic growth top estimates by nearly ~20%, driven by eCommerce growth and favorable price trends.
On the brand/category level, we were pleased to see the rebound on the champagne side, which we would expect to continue through the fiscal year with the company's recently acquired stake in Jay-Z's Armand de Brignac brand.
We were also pleased to see continued strength on the leather goods, ready-to-wear, and cosmetics side, with Dior seeing continued strength from Lady Dior and its fragrance portfolio, and Louis Vuitton benefitting from continued adoption of its digital services platform.
Cosmetics retail arm Sephora also saw continued success, driven by its superb omni-channel strategy and ongoing expansion in China.
Overall, we view LVMH's Q1 as exceptionally strong across the board, particularly given the macro environment, with Asia and US regions up +86% and +23% respectively vs. Q1 2020 (or +26% and +15% vs. pre-pandemic 2019).
We look forward to seeing the business continue to grow as more global economies re-open and as the company digests and integrates the iconic Tiffany brand into its best-in-class distribution and marketing playbook.