LVMH Posts Jump in Second-Half Net Profit -- Update
January 26 2017 - 02:36PM
Dow Jones News
By Matthew Dalton
PARIS -- LVMH Moët Hennessy Louis Vuitton's net profit jumped
14% in the second half of 2016 from a year earlier, pushed higher
by strong sales across much of the conglomerate's empire of luxury
brands.
The luxury-goods maker reported Thursday that sales in the
latter half of 2016 were EUR20.4 billion euros (about $21.9
billion), up 7.3% and beating analyst expectations of EUR20.2
billion. Net profit in the half was EUR2.27 billion. Sales for the
entire year were EUR37.6 billion.
The results herald a potential turnaround for the luxury
industry, which had seen its big-spending clients cut back over the
last two years amid terror attacks in Europe, a crackdown on
corruption in China and political uncertainty in the U.S.
Yet Bernard Arnault, chief executive and founder of LVMH,
sounded a note of caution about the year ahead. Geopolitical
uncertainty and the threat of rising interest rates have created
volatility in the business environment, Mr. Arnault said.
"For every 10 years, we have eight good years and two not good
years," Mr. Arnault said, adding that eight years have passed since
the financial crisis. "We really have to be prudent."
With a portfolio of dozens of brands, LVMH is viewed as a
bellwether for the luxury industry. Its holdings include Louis
Vuitton, cosmetics retailer Sephora, fashion house Fendi, high-end
jeweler Bulgari and Dom Pérignon champagne.
LVMH sales in the fourth quarter accelerated, confirming that
the luxury sector is rebounding, said Exane BNP Paribas analyst
Luca Solca.
"All divisions appear strong," Mr. Solca wrote in a note to
clients.
Write to Matthew Dalton at Matthew.Dalton@wsj.com
(END) Dow Jones Newswires
January 26, 2017 14:21 ET (19:21 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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