By Jason Chow
PARIS-- LVMH Moët Hennessy Louis Vuitton SE said Tuesday its
second-quarter revenue rose 23% as the French luxury goods company
benefited from a weak euro and strong sales at its formerly
struggling Louis Vuitton brand.
LVMH said revenue rose to EUR8.38 billion ($9.29 billion) in the
quarter, while first-half net profit rose 15% from a year earlier
to EUR2.96 billion. LVMH doesn't publish quarterly profit
figures.
Europe's largest luxury players, including Hermès International
SCA and Gucci owner Kering SA, have been especially boosted by the
weak euro as sales abroad account for even more when translated
back into euros. Currency volatility has also driven Chinese
shoppers to Western Europe and Japan, as prices for handbags and
other items are significantly higher in their home countries owing
to taxes and exchange rates.
The weak euro earlier this year masked weakness at LVMH, an
industry bellwether that owns a multitude of brands including
Céline, Lora Piana and Moët et Chandon. Its wines and spirits
division posted slow sales as Chinese consumers stopped buying
cognac, while the company's fashion and leather-goods unit flailed
as the flagship Louis Vuitton brand still struggled.
But LVMH's second-quarter results show that the company's weak
spots are on the mend. Organic revenue growth, which strips out the
effects of the currency volatility, was 9%.
"We are confident with the remaining part of the year," said
Chief Financial Officer Jean-Jacques Guiony. "Most of our markets
are showing good momentum."
LVMH's fashion business is growing again, led by a Louis Vuitton
brand that has come back in vogue. Sales at its fashion and leather
goods division, which makes up more than a third of total group
revenue and includes Louis Vuitton, Fendi and Bulgari, rose 24% to
EUR2.96 billion in the three-month period. The division's organic
revenue growth was 10%.
Mr. Guiony said sales of Louis Vuitton's staple monogram
handbags "have been very strong" though he didn't break out figures
for the label.
Meanwhile, sales at LVMH's wine and spirits division rose 19% to
EUR992 million. While cognac sales continued to struggle in China
as a continuing crackdown on corruption and gift-giving has crimped
sales there, demand for both cognac and Champagne was strong in the
U.S., the company said.
Revenue at the selective distribution division, which includes
duty-free retailer DFS and cosmetics label Sephora, increased 22%
to EUR2.64 billion. LVMH said DFS continued to struggle because of
weak sales in Asia, but Sephora posted 8% organic growth, led by
demand in the U.S.
The changing tastes of Chinese shoppers--a large part of the
group's clientele--is driving revenue in Western Europe and Japan
at all LVMH's brands. Sales in Japan increased 34% in the quarter,
while revenues in Europe rose 14%.
Sales in Asia excluding Japan declined 5%, as Chinese tourists
shunned the traditional shopping hub of Hong Kong, opting for other
cities with less political volatility.
Write to Jason Chow at jason.chow@wsj.com