The world's largest luxury goods company, which owns Krug champagne and shoe-maker Berluti, posted net profit for the first six months of €1.05 billion (US$1.36 billion), up from €687 million a year ago as all divisions posted double-digit revenue growth.
In a sign the company plans to solidify its position as the industry's largest player, LVMH executives pledged to employ marketing efforts and invest in fast-growing markets like China to make market share gains.
"In the current recovery from the economic crisis, LVMH will continue to gain market share," the company said in its statement.
Revenue for the six months to June 30 was €9.1 billion, up 17% from €7.8 billion a year earlier and ahead of analyst expectations of €8.85 billion. All divisions, from perfume to wine posted double digit sales growth with the highest increase coming from watches and jewelry, up 28% to €443 million. LVMH said there was a strong recovery in orders. The business was one of the hardest hit in the sector as retailers dramatically cut back on orders during the crisis, preferring to draw down stocks before buying new products.
The fashion and leather goods division, which houses the company's star brand and one of the industry's strongest performers throughout the crisis, the leather goods maker Louis Vuitton, posted 18% growth to €3.52 billion. Luxury consumers took refuge in more classic leather accessories during the economic downturn, preferring staid brands to the trendy handbags of the boom years.
"We were the highest in the consensus, but they managed to beat us anyway," said Luca Solca, analyst with Bernstein.
by Mimosa Spencer WSJ.com
