Beating analysts' estimates by one percentage point, LVMH reported a 13 percent increase in its total turnover for the first six months of this year to €10.29 billion, with an organic increase of 15 percent before changes in structure and currencies. Net earnings jumped by 25 percent to €1.31 billion for the period.
There was a slowdown in the second quarter, however. The group's sales had risen by 17 percent in the first quarter as compared to the same period a year ago, but in the second one they rose by only 9 percent to €5.04 billion. European markets have been softening lately, but company officials expect domestic consumption and tourism flows to hold up for the balance of this year.
There are no signs of any slowdown in the U.S. or in Asia. In local currencies, the group's sales went up in the first six months of the year by 26 percent in Asia, by 17 percent in the U.S. and by 8 percent in Europe. As a bloc, emerging markets contributed the most to the sale increase and came to represent 36 percent of the total turnover during the period, up from 32 percent a year ago.
All the segments recorded improved sales and profits in the first half with the exception of the highly competitive perfume and cosmetics sector. In fashion and leathergoods, operating earnings grew by 17 percent to €1.38 billion on 13 percent higher revenues of €3.97 billion.
Louis Vuitton continued to be the star of the segment, but the management pointed also to an improved performance for Fendi, Donna Karan and Céline. New Vuitton stores are planned for this year in Singapore and Milan, to be followed by one in Rome next year.
LVMH's good results boosted those of its main shareholder, Christian Dior. Its net profit jumped by 29.5 percent to €1.44 billion on 13 percent higher consolidated sales of €10.7 billion for the first half, thanks also to a strong performance by the Dior fashion house. Its revenues rose by 19 percent during the period to €445 million, in spite of the adverse publicity surrounding its former creative director, John Galliano, and its operating profit doubled to €16 million. The Dior stores' sales went up by 27 percent in local currencies.
Meanwhile, the European Commission has cleared LVMH's proposed $6 billion acquisition of Bvlgari, whose sales rose by 23.6 percent to €548 million in the first half. Officials denied a rumor that members of the Bulgari family had received a higher price for their shares than the amount set in its tender officer.