Source: Company reports

1H16 RESULTS

For the first half of 2016, ended June 30, French luxury brandLVMH reported net revenues of€17,188million, up3.0% from €16,707 million in 1H15, and above the consensus estimate of €16,970 million. Organic revenue growth was4% during the period.

SALES BREAKDOWN BY BUSINESS GROUP

• The Wines and Spirits segment increased by 7% year over year and by 9% organically, in 1H16. Champagne performed strongly in Europe and the US. Hennessy reported strong growth in the US and improved momentum in China.
• The Fashion and Leather Goods business group reported subdued results, with sales declining by 1% during the period (flat on an organic basis). Fendi, Céline, and Kenzo performed well in this segment. Marc Jacobs continued to reposition collections and the Donna Karan sale was announced during the period.
• Comparable sales in the Perfumes and Cosmetics segment increased by 5% year over year and by 8% on an organic basis. The company noted strong performance at Christian Dior, driven by the success of the Sauvage, J’adore, Miss Dior and the newly launched Poison Girl brands. Guerlain expanded its La Petite Robe Noire brand to a makeup line based on the success of the perfume by the same name.
• The Watches and Jewelry segment saw comparable sales growth and organic growth of 4% in the first half. The company noted that this segment outperformed the market, thanks to the success of Bulgari and the refocusing of the TAG Heuer brand.
• In the Selective Retailing business group, reported sales growth and organic growth were 4% and 5%, respectively. The company noted that Sephora continued to gain market share globally, recording double-digit growth in revenues and profits. DFS (which stands for “Duty-Free Shopping”) continues to face challenges in Asia due to a difficult tourist environment.

PERFORMANCE BY GEOGRAPHY

LVMH stated that its business in the US remained strong, resulting in 7% organic growth in the first half. The company noted that while trends are stable in Europe, the France business has been negatively affected by a fall in tourism. Trends in Asia steadily improved during the period. The company reiterated its commitment to strengthening its global leadership position in luxury goods by controlling costs and focusing its investments on the quality and innovation of its products.