Christian Dior positive on further growth in 2014

ANALYSIS_ Christian Dior group has reported sales of 16.2 billion euros for the six months to December, 2013 and net income attributable to the group up to 8 billion euros. The luxury group has closed the first half of their current fiscal year with a turnover of 16.2 billion euros and a net profit

of 794 million, both figures ahead of market expectations.

Dior Couture posted first-half sales of 758 million euros, up 20 percent in constant exchange rates, and a 31 percent jump in operating income, at 108 million euros. "The excellent performance of the House of Dior was driven primarily by the strength of the leather goods, ready-to-wear men's and women and accessories," summed up the luxury goods group in a note. The current half operating profit amounted to 108 million euros, up 31 percent.

Cash

flow before financial investments, capital transactions and financing transactions, amounted to 2.433 billion euros for the period, with the French maison "maintaining a good momentum in the United States and Asia," as they stressed in a note Friday.

On better-than-expected figures, shares at Christian Dior SA gained 1.5 percent in Paris. The Board of the haute couture brand has agreed to pay on April, 17 an interim dividend of 1.2 euro gross per share.

Christian Dior has "the best assets" to keep growing in 2014

In an estimated economic and monetary environment "uncertain in Europe", the Christian Dior Group believes to have "the best assets to continue in 2014 its growth for all of its businesses". The luxury group maintains a strategy focused on developing its brands and strengthening its expertise, supported by "strong innovation and expansion in growing markets" policy.

Feeling confident about what the future lies ahead, Dior has pinpointed that, thanks to the agility of its organization and the good balance between its different businesses and geographic areas where it operates, the group "addresses the year with confidence and has set back the goal of strengthening its lead in the global market luxury".

Analysts at Aurel BGC have adjusted their price target on Christian Dior from 157 to 150 euros to take into account the newly released data, but reaffirmed their 'buy' recommendation "given the attractive valuations of luxury giant."

The consulting firm noted that sales of the brand Dior Couture, another subsidiary of Christian Dior alongside LVMH, rose 14 percent year to 758 million euros, against 752 million expected; while and current operating income increased 31 percent to 108 million dollars, against 98 million expected.

"Dior Couture has a great dynamic, under the leadership of its new creative director Raf Simons. The brand continues to gain significant market share from its main competitors," said the firm in a note to investors.