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LVMH Says “Buoyant Demand” Drove Double Digit Sales

LVMH Moët Hennessy Louis Vuitton’s fashion and leather goods segment outperformed its other business categories in the first half as the luxury group noted that overall second quarter revenues rose by 15 percent, with “good growth” in the U.S., Asia and Europe, and a rebound in France in the period.

In a Nutshell: According to Bernard Arnault, LVMH’s chairman and chief executive officer, “LVMH has made an excellent start to the year. These results once again illustrate the effectiveness of our strategy and the exceptional desirability of our Maisons, whose products transcend time. Their constant demand for quality and their consistently refreshed creativity are key to LVMH’s success, always guided by a long-term vision, combining exemplarity and responsibility in all the company’s actions.”

LVMH said the fashion and leather goods business, which recorded organic revenue growth of 18 percent and profits from recurring operations at up 17 percent, saw exceptional performances at its Louis Vuitton and Christian Dior brands. LVMH said the Louis Vuitton brand “achieved remarkable growth in all of its businesses and in all regions.” At Dior, LVMH cited the success of the fashion house’s new line 30 Montaigne. Fendi celebrated the late designer Karl Lagerfeld‘s 54 years with the company, while Celine is beginning a roll out of its new store concept. The French conglomerate also said that “Loro Piana recorded steady growth with, in particular, the success of a new personalized shoe service and a temporary boutique in New York.” Loewe’s, according to LVMH, has seen “excellent performance, driven in particular by the success of its new collections.”

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Net Sales: Revenues for the first half ended June 30 saw 15 percent growth to 25.08 billion euros ($27.92 billion), from 21.75 billion euros ($24.22 billion) a year ago.

For the first half, fashion and leather goods revenues were 10.43 billion euros, or $11.61 billion. The second best performing category was perfumes and cosmetics, up 9 percent in organic growth, following selective retailing, which includes duty-free shops operator DFS, at up 8 percent. Wines and spirits rose 6 percent, while watches and jewelry sales were up 4 percent.

Earnings: The company said profits from recurring operations rose 14 percent to 5.30 billion euros, or $5.90 billion, from 4.65 billion euros, or $5.18 billion. For fashion and leather goods, profits for the first half rose 17 percent to 3.25 billion euros, or $3.62 billion.

CEO’s Take: “Despite buoyant demand, we will continue to manage costs and remain vigilant into the second half of the year,” Arnault said. “We are therefore entering the second half of the year with confidence and count on the talent of our teams and their shared entrepreneurial passion to further increase, once again in 2019, our leadership in the world of high-quality products.”