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Taking a quick look at Louis Vuitton Moet Hennessy’s (LVMH) results presentation from this morning, we see that the momentum in spirits brands continues, displaying strength on strength.  Lapping a +15.5% constant currency comp in Q1 2012, the company posted a +7.0% result.  For the spirits companies, the results improve as a lateral when breaking out Champagne and Wines versus Cognac and Spirits.  Champagne and Wines grew only +0.3% (reported) versus a 12.2% comp while Cognac and Spirits were +9.0% (reported) versus a very difficult comp, +27.9% reported in Q1 2012.


In terms of geography, Asia was +12.0%, the U.S. +9% and Japan +7.0%.  These results augur well for the spirits companies in our coverage (Brown Forman and Beam) whose valuations are becoming more interesting as the stocks lag and the rest of the staples group grinds higher.

Valuation has been our stumbling block with respect to the spirits names, not business momentum. So, as most of the staples group rushes head long in the race for most absurd valuation, the spirits names get incrementally more interesting as those companies might not have the most “attractive” valuations in staples, but at least there is something to warrant a premium valuation.


Robert  Campagnino

Managing Director




Matt Hedrick

Senior Analyst