LVMH's H1 Results Indicate a Prudent Resurgence of Luxury

The group experienced a 28 percent gain in its half-year performance, totaling €36.7 billion.

LVMH, the world's largest luxury group, reported a robust first half performance, with a 28 percent revenue rise compared to the prior year. The rise totaled €36.7 billion, with the group indicating that all its business divisions saw double-digit organic sales growth throughout the time. Demands from Europe and the United States were ascribed to the group's significant accomplishments. Concurrently, Asia, particularly China, experienced diminished growth due to the newly implemented health restrictions.

Analyzing the numbers quarterly reveals a deceleration in the group's growth. In contrast to the Q1 statistics, the recent Q2 financial report recorded an only 19 percent increase, compared to a 23 percent gain in the earlier. The diminished growth indicates the influence China exerts on the conglomerate. Despite increasing demand from clients in Europe and the United States, it cannot compensate for the absent demand from its Chinese consumers.

The group's H1 performance is driven by its substantial fashion and leather division, which achieved an organic revenue growth of 24 percent. LVMH asserts that the "exceptional creativity" of its maisons is fundamental to its success. Louis Vuitton, its powerhouse, achieved remarkable performance in the first half of its business operations and sustained profitability. Notable features are Nicolas Ghesquière’s debut presentation at the Musée d’Orsay for his women's Fall/Winter 2022 collection. At the men's universe, Louis Vuitton hosted multiple spin-off shows in honor of the late Virgil Abloh.

Likewise, Christian Dior experienced significant expansion across all product categories, and the collections designed by Maria Grazia Chiuri were positively welcomed by customers. Additionally, the business has reopened its flagship store at 30 Avenue Montanige in Paris following three years of refurbishment. This solidified the resurgence of physical retail establishments, with new boutiques emerging in recent months. Brands such as Fendi, Celine, Loewe, Marc Jacobs, Loro Piana, and J.W. Anderson exhibited robust growth.

Image: Louis Vuitton

The group's watches and jewellery division experienced an organic revenue increase of 16 percent in the first half. Brands such as Tiffany & Co., Bvlgari, TAG Heuer, Zenith, and Hublot performed admirably. The previous two jewellery firms shown significant growth through their High Jewellery collections, including Tiffany & Co.'s "Blue Book" and Bvlgari's "Eden: The Garden of Wonders." The successful resurgence of Watches and Wonders facilitated increased visibility for watch brands' novelties and generated prospects for excitement.

In addition to these two primary revenue sources, LVMH's wines and spirits, fragrances and cosmetics, and selective retailing divisions also experienced significant increase, ranging from 13 to 22 percent. Specifically, for its selective retailing divisions, profit from recurring operations surged by 181 percent. This was ascribed to robust demand from North America, France, and the Middle East.

Image: Bvlgari

Commenting on the group's semiannual performance, Bernard Arnault, Chairman and CEO of LVMH, stated: “LVMH has experienced a remarkable beginning to the year, with all of our business divisions contributing.” The originality and quality of our products, the excellence of their distribution, and the rich cultural heritage of our Maisons, driven by their history and expertise, empower the company to thrive globally. As we enter the latter part of the year, we do so with assurance; but, in light of the prevailing geopolitical and health circumstances, we will maintain vigilance and rely on the agility and expertise of our staff to further our worldwide leadership in luxury goods in 2022.