Parris (France) (AFP) – LVMH, the world’s top luxury group, said Monday that sales growth accelerated in the second quarter as it beat analyst expectations with stable net profit in the first half of the year. The performance of the group, whose brands include Louis Vuitton, Dior, Celine, and Hennessy, could be a sign that the struggling luxury sector is starting to turn the corner.
LVMH reported a net profit of 5.7 billion euros ($6.5 billion) despite the “geopolitical and economic environment that remained disrupted, amplified by the conflict in the Middle East”. First-half sales dipped by three percent to 38.6 billion euros. Both figures beat the consensus of analyst expectations compiled by FactSet. While the group’s sales slumped six percent in the first three months of the year, they edged 0.1 percent higher in the second quarter to 19.5 billion euros.
“Accelerating growth in the second quarter arose in particular from the success of Jonathan Anderson’s first designs for Christian Dior, the remarkable performance of Louis Vuitton’s exceptional new stores in Beijing and Seoul, and Tiffany and Bulgari’s iconic lines,” chief executive Bernard Arnault said in a statement. Following the post-pandemic boom, the luxury sector hit a rough patch as the Chinese market slowed, with global trade being disrupted by tariff wars and now the Middle East conflict.
While the reported sales figures showed only slight growth, this included a five percent negative impact from changes in exchange rates. Stripping out that effect and changes in business operations, sales rose by two percent in the first half and by three percent in the second quarter.
The main fashion and leather goods business group saw sales fall by five percent on a reported basis and by one percent on a comparable basis. However, sales rose one percent on a comparable basis in the second quarter, marking the first quarterly gain in two years. Sales rose in most regions on a comparable basis, including by six percent in Asia excluding Japan and four percent in the United States. Sales in Europe were flat.
© 2024 AFP
