LVMH Just Proved That the Luxury Market Is Still Strong

LVMH Moët Hennessy Louis Vuitton maintained its strong momentum in the second quarter, indicating global demand for luxury goods is thriving despite continuing trade tensions.

The group’s overall revenues were up 15 percent in the three months ended June 30 to 12.54 billion euros, helped by another strong performance in its key fashion and leather goods division. Sales were up 12 percent on an organic basis.

Group share of net profit rose 9 percent to 3.27 billion euros in the first half, while profit from recurring operations advanced 14 percent to 5.29 billion euros, with an operating profit margin of 21.1 percent, reflecting a negative foreign exchange impact.

The luxury giant said sales in the fashion and leather goods division, which includes Fendi, Dior and Givenchy, jumped 20 percent on a like-for-like basis to 5.31 billion euros during the quarter, zooming past consensus estimates.

The division had posted organic growth of 13 percent in the same period a year ago, and recorded a 15 percent rise in like-for-like sales in the first quarter.

Fashion and leather goods outperformed all other segments. Wines and spirits were up 4 percent, while perfumes and cosmetics recorded organic growth of 10 percent. Selective retailing grew 7 percent, and watches and jewelry posted a 4 percent increase.

LVMH does not provide guidance, merely reiterating in familiar wording its plan to reinforce its global leadership position in luxury goods.

“Despite buoyant demand, we will continue to manage costs and remain vigilant into the second half of the year,” Bernard Arnault, chairman and chief executive officer of LVMH, said in a statement.

The luxury conglomerate’s share price is up 47 percent so far this year, propelling Arnault near the top of the Bloomberg Billionaires Index, where he briefly replaced Bill Gates as the world’s second richest person after Amazon founder and CEO Jeff Bezos. Arnault is now back in third position, with a net worth of $106 billion.

This story was reported by WWD and originally appeared on WWD.com.

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