LVMH 1st Half Results Confirm Buoyant Demand for Luxury -- Earnings Review
July 25 2019 - 5:59AM
Dow Jones News
By Cristina Roca
France's LVMH Moet Hennessy Louis Vuitton SE (MC.FR) reported
first-half results Wednesday afternoon. Here's what we watched:
OPERATING PROFIT: The luxury-goods titan said operating profit
came to EUR5.30 billion, slightly short of a EUR5.37 billion
consensus estimate provided by FactSet.
REVENUE: The owner of Louis Vuitton posted revenue of EUR25.08
billion, up 15% year-on-year and above analysts' expectations of
EUR24.77 billion, according to a consensus estimate provided by
FactSet.
WHAT WE WATCHED:
-FASHION & LEATHER GOODS: The group's key
fashion-and-leather goods division had been broadly expected to
post strong results. It outdid those high expectations, with
revenue in the division accelerating to 20% organic growth in 2Q,
led by Louis Vuitton and Dior.
-MARGIN: LVMH's operating margin shrank by 30 basis points.
While the market had anticipated currency hedging to be a drag,
margins also came under pressure due to reinvestment, which was
stepped up to promote further growth, RBC analyst Rogerio Fujimori
said. "These investments are paying off hence the sales growth
acceleration," Bryan Garnier analyst Loic Morvan noted.
-GOOD NEWS FOR THE SECTOR: LVMH's 2Q trends confirm that,
"despite an increasingly demanding comparison basis and some macro
uncertainties, the luxury goods industry remains buoyant," Morvan
said.
Write to Cristina Roca at cristina.roca@dowjones.com;
@_cristinaroca
(END) Dow Jones Newswires
July 25, 2019 05:44 ET (09:44 GMT)
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