Sales at Vuitton, Dior division boosts LVMH in second quarter
today Jul 24, 2019
Luxury goods group LVMH on Wednesday posted better-than-expected second quarter revenue, lifted by accelerating momentum in its fashion and handbag division that houses its Louis Vuitton and Christian Dior megabrands.
LVMH, whose labels also include champagne maker Moet & Chandon, said second quarter sales rose 15% to 12.5 billion euro ($13.93 billion) euros, up 12% at stable exchange rates and a comparable number of stores. Analysts had expected like-for-like sales growth of around 10% in the period.
For the six months to end-June, LVMH’s earnings before interest and tax (Ebit) rose 14% to 5.3 billion euros, a touch below forecasts. Operating margins were a touch below forecasts, however, at 21.1%, in part due the step-up in spending on advertising and its brands.
The French conglomerate also attributed growth to strong Chinese demand and investments in marketing and new designs.
“With Chinese customers, there was a noticeable improvement between the first quarter and the second quarter,” LVMH’s Financial Director Jean-Jacques Guiony told analysts.
Its Christian Dior brand, while still estimated to be less than a third of Vuitton’s size, was also one of the standouts of the second quarter, with sales growth exceeding the 20% of the broader fashion and leather goods unit, according to Guiony.
Within Paris-based LVMH, Vuitton is betting on temporary pop-up stores to spike consumer interest and has turned to DJ-turned-designer Virgil Abloh to grow its menswear lines.
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