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French luxury goods group LVMH on Tuesday announced record sales and profits for 2018, and said that its fast-growing Asia business had yet to be affected by the Chinese economic slowdown or the incipient US-China trade war.

Net profit for the year rose 18 per cent to €6.35bn, from €5.36bn in 2017, on sales that rose 10 per cent to €46.83bn. The results were roughly in line with analysts’ forecasts.

Bernard Arnault, chairman and chief executive, said LVMH expected its brands and companies, which include Louis Vuitton, Christian Dior and Moët & Chandon champagne, to deliver continued progress in 2019 in spite of “an environment that remains uncertain at the start of the year”.

Sales growth was steady in all regions in the fourth quarter except the US — similar to the performance earlier in the year, according to Jean-Jacques Guiony, finance director.

Organic growth in Asia, excluding Japan, was 15 per cent compared with last year. Sales in Europe were up 7 per cent on the same measure, while in the US they climbed 8 per cent.

“We see no particular sign of a slowdown in the China market,” he said, although purchases by Chinese customers had shifted slightly to the mainland from Hong Kong and other east Asian markets, perhaps because of a weaker renminbi. “The market sees the glass as half empty. We see it as half full.”

Luxury goods companies and other exporters dependent on sales to China are bracing for the impact of the country’s economic slowdown and for possible fallout from any worsening of the US-China trade conflict.

In recent days, companies including US chipmaker Nvidia and Caterpillar, which sells earthmoving equipment, have blamed China’s slowing growth for disappointing profit predictions.

Mr Guiony said luxury goods consumers tended to be affected more by sudden shocks than by gradual changes in economic conditions. “If there was to be real trade war between the US and China — and we’re not there yet — that would have an effect,” he said.

The company also performed well in Europe, Mr Guiony said. Although LVMH had to close early on several Saturdays because of the gilets jaunes protests in France, many customers had switched to Sunday shopping and there was no obvious impact on LVMH’s numbers in the latest quarter.

LVMH said it was stockpiling champagne and cognac in the UK in case of severe disruption from a “no-deal” Brexit.

“We’ve added four months of stock in the UK,” said Philippe Schaus, head of Moët Hennessy, the wines and spirits part of the group.

Profit from recurring operations in fashion and leather goods, the core of LVMH’s business, rose 21 per cent last year, accounting for €5.94bn of the total. The highest growth in profit from recurring operations came from watches and jewellery, at 37 per cent, and the slowest from wines and spirits, at 5 per cent.

The company said it planned to lift the total dividend by 20 per cent for the year to €6.

Copyright The Financial Times Limited 2019. All rights reserved.

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