LVMH Profit Meets Estimates As Liquor Sales Offset French Slump
LVMH Moet Hennessy Louis Vuitton SE, the world’s biggest luxury-goods maker, reported first-half profit in line with analyst estimates as lower tourism flows to France offset stronger demand for its wines and spirits.
First-half profit from recurring operations was little changed at 2.96 billion euros ($3.25 billion), the Paris-based company said late Tuesday. Analysts expected 2.92 billion euros. Sales rose 4 percent on an organic basis in the second quarter, compared to the consensus of 2.9 percent, an acceleration from the first quarter’s pace.
The wines-and-spirits business grew revenue 9 percent in the first half, beating analysts’ expectations for 5 percent growth, boosted by a good start to the year for champagne in the U.S. and Europe and improved cognac sales in China after two years of sluggish demand.
The owner of Louis Vuitton handbags and Christian Dior perfumes this week agreed to sell Donna Karan International for $650 million after failing to turn around the brand. LVMH’s significant disposal in more than a decade may lead to further divestments, such as a sale of Marc Jacobs, according to Citigroup analyst Thomas Chauvet. It also could fuel a 1 billion-euro share buyback, Fred Speirs, an analyst at UBS AG, has said.
Total revenue for the six months gained 3 percent to 17.2 billion euros, edging the 17 billion euros analysts had estimated.
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