UK: Luxury goods tout growth, some shares seen pricey
Moet Hennessy Louis Vuitton (LVMH) and other makers of luxury consumer goods are touting optimistic sales and profit targets regardless of stock downgrades which suggest growth may soon lose momentum.Even with a batch of impressive first half earnings from leading companies this week, some analysts on Thursday stuck to a more sober sector view, warning that the companies' outlooks do not match the current expensive ratings of some shares.LVMH, which accounts for the largest single slice of $60 billion worldwide annual luxury goods sales, on Thursday raised its profit growth forecast for the full year and said it expected "very sustained growth" in 2001.At Italian jeweller Bulgari , consolidated net profit doubled on sales which rose by 44 percent in the first six months of 2000.Chief Executive Francesco Trapani said he was positive about the second half on the basis of a new watch line and fragrance. Concerns about a slowdown were unjustified, he said in an interview. "The market remains in very good health," he told Reuters.Number two luxury goods group Richemont said it expected to have a "very good" first half operating profit. Chairman Nikolaus Senn told Richemont's annual meeting sales grew by about 30 percent in the five months to August.First half figures this week from companies, including leather and silks house Hermes and retail group Pinault Printemps Redoute -- which owns 42 percent of Italian fashion house Gucci Group NV -- have landed in line or slightly above market expectations.But analysts have been less sanguine in their assessment of prospects for shares in luxury goods. The sector has been one of the hottest in the consumer goods business over the past two years with some highly contested takeovers and significant growth rates.
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