LVMH Profit Was Flat in First Half
July 26 2016 - 2:07PM
Dow Jones News
By Manuela Mesco
MILAN -- LVMH Moët Hennessy Louis Vuitton said Tuesday its
first-half net profit was flat compared with a year earlier,
dragged down by the fashion and leather goods division.
The company, a bellwether for the luxury-goods industry,
reported net profit of EUR2.96 billion ($3.25 billion) for the
first half, while revenue was up 3%, at EUR17.2 billion.
Sales in Europe rose 5% in the first half of the year, but
slowed down in the second quarter compared with the first one, the
company said. In particular, sales declined in France in the second
quarter compared with the same period last year, said CFO
Jean-Jacques Guiony.
Terrorist attacks in France and a fall in tourists have weighed
on luxury brands' French markets. In the wake of the terrorist
attacks in Paris last November, the company saw sales slow during
the first quarter this year as tourists flows decreased.
"A key issue is tourist flow, which is totally unpredictable,"
Mr. Guiony said in a conference call with analysts.
By contrast, sales in the U.S. grew 7% in the first half of 2016
on the year -- the fastest-growing region for the company. Asia and
Japan were flat.
LVMH, which owns such brands like as Louis Vuitton, Celine and
Moët and Chandon, reported a 17% profit increase in its wines and
spirits division, while profit for fashion and leather goods fell
2%.
Mr. Guiony said that profitability at the fashion division's
main brand, Louis Vuitton, was almost identical compared with last
year. This suggests that profits at other brands have fallen in the
period.
The company, which announced earlier this week that it agreed to
sell the Donna Karan brand, said that Marc Jacobs is continuing its
repositioning, but it isn't for sale.
"We are convinced that we can create value" from the brand, he
said.
Fashion and leather goods was also the only division posting a
fall in terms of revenue, as revenue slipped 1% compared with the
first half of 2015.
Write to Manuela Mesco at manuela.mesco@wsj.com
(END) Dow Jones Newswires
July 26, 2016 13:52 ET (17:52 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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