LVMH sales rise as US luxury demand offsets hit from Iran war
XLY•Fashion and leather goods return to growth
The fashion and leather goods division, which generates the bulk of LVMH's operating profit, posted 1% organic growth. That was its first quarterly increase in two years, but fell short of analysts' expectations for a 1.7% rise.
LVMH said the Iran war reduced growth in the division by 1 percentage point, but added that Dior was gaining momentum under new creative director Jonathan Anderson.
In Europe, sales were flat in the quarter, stabilising after a decline in the first three months of the year as conflict in the Middle East weighed on tourism.
Luxury sector faces uneven regional demand
European luxury brands have stepped up their focus on the United States, opening stores and staging fashion events to attract wealthy shoppers buoyed by the AI and technology boom, while demand remains subdued in other regions.
However, the update from LVMH — the first major luxury group to report first-half results — may not be enough to reassure investors that the $400 billion luxury sector is finally emerging from a two-year downturn.
First-half profit and shares remain under pressure
For the first half, sales rose 2% on an organic basis, but fell 3% on a reported basis to €38.6 billion. Over the same period, profits from current operations fell 4% to €8.7 billion, though the operating margin was broadly stable at 22.5%.
Shares in the French group, controlled by billionaire Bernard Arnault, have fallen 28% since the start of the year, making LVMH one of Europe's worst-performing large-cap stocks.
($1 = 0.8792 euros)
