Hennessy sales soar 10% on China rebound

Cognac house Hennessy saw volume sales climb 10% in the 2016 calendar year, however parent company LVMH said a “complex” Asia hit travel retailer DFS Group’s profitability.

Hennessy led LVMH’s Wines & Spirits growth, with 10% volume gains

In its full year financial statement, Moët Hennessy Louis Vuitton (LVMH) said total revenues climbed 5% to €37.6 billion, with Wines & Spirits contributing €4.8bn and Selective Retailing adding €919 million.

The Wines & Spirits division grew 7%, benefiting from “good growth” in the US and a “rebound” of shipments to China.

“All qualities” contributed to Hennessy’s volume gains, which were driven by an “excellent” performance in the US.

The continued recovery in China and other Asian markets also pushed up growth, noted the firm.

Glenmorangie Scotch whisky and Belvedere vodka also saw “continued progress” throughout 2016, the financial statement read.

The Selective Retailing division however, where LVMH reports DFS Group sales, was impacted by a “difficult tourism context” in Asia.

Despite profitability challenges, the company noted expansion in Macau, the inauguration of new T Galleria stores in Cambodia and Venice, Italy, and a “rebalanced” brand and product offer as key DFS Group achievements over the year.

Bernard Arnault, chairman and CEO of LVMH, said: “LVMH achieved an excellent performance in 2016 within a context of geopolitical and economic instability.  Continued innovation, entrepreneurial spirit and the quest for excellence: all Maisons continue to assert these core values while maintaining rigorous execution of their strategies on the ground.  In an environment which remains uncertain, we can count on the appeal of our brands and the agility of our teams to strengthen, once again in 2017, our leadership in the universe of high quality products.”

In its financial statement the company noted: “Despite a climate of geopolitical and currency uncertainties, LVMH is well-equipped to continue its growth momentum across all business groups in 2017.

“The Group will maintain a strategy focused on developing its brands by continuing to build on strong innovation and a constant quest for quality in their products and their distribution. Driven by the agility of its teams, their entrepreneurial spirit, the balance of its different businesses and geographic diversity, LVMH enters 2017 with caution but has, once again, set an objective of increasing its global leadership position in luxury goods.”

The full year results were broadly in line with nine-month figures, which saw the Wines & Spirits division achieve 7% organic revenue growth, bolstered by a strong performance from Hennessy Cognac.