French luxury conglomerate LVMH Moët Hennessy Louis Vuitton Wednesday said net profit in the first half of the year jumped 24%, fueled by strong sales across its portfolio of dozens of brands.
LVMH's net profit for the half was EUR2.12 billion ($2.47 billion). Revenue for the period rose 15%. Handbag maker Louis Vuitton, LVMH's flagship brand, led the way, posting strong sales growth across the brand's product lines, the company said.
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The conglomerate's sales received a bump from consolidating the operations of Rimowa, the German high-end luggage maker that LVMH took an 80% stake in this year.
LVMH joins luxury goods providers like Hermes International SCA and Burberry Group PLC in riding the wave of a rebound in the global luxury market after two off years marred by terror attacks in Europe and a pullback by Chinese shoppers. Tourism has rebounded as terror fears have waned, fueling high-end shopping sprees around the world. China's wealthy consumers are opening their wallets again.
"LVMH has enjoyed an excellent first half, to which all our businesses contributed," said Chief Executive Bernard Arnault. "In an environment that remains uncertain, we approach the second half of the year with caution."
Sales at LVMH's brands, which include Hennessy Cognac, fashion house Fendi and watchmaker TAG Heuer, have proved resilient to the downturn. This year, LVMH's revenue growth is outpacing the rebound.
Organic revenue growth, which strips out the effects of the currency volatility, rose 12% for the three months to June 30. In Asia excluding Japan, LVMH sales rose 17% in the period, while Europe benefited from a rebound in tourist flows, sending sales up 11%. Sales in the U.S. rose 8%.
"We are really enjoying very nice growth with Chinese customers," chief financial officer Jean-Jacques Guiony said on a call with analysts. He said that the current trends can't be extrapolated for the full year because the company benefited from a favorable comparison base in the first half.
All of the group's main divisions posted strong organic revenue growth in the second quarter. The watches and jewelry division posted a 14% year-over-year growth in the second quarter, while sales of wine and spirits advanced 6% during the period, and selective retailing rose 12% as beauty chain Sephora continued its hot streak.
Meanwhile, sales growth in the fashion and leather goods division, home to the Louis Vuitton brand, slowed slightly from 15% in the first quarter to 13% in the second quarter.
Mr. Arnault, the billionaire whose family controls LVMH, used last quarter to execute one of his biggest transactions in years, paying EUR12 billion to unite his fashion house Christian Dior with LVMH. The transaction places Dior, which Mr. Arnault also controlled for years through a separate company, in LVMH's portfolio.
Write to Nick Kostov at Nick.Kostov@wsj.com and Matthew Dalton at Matthew.Dalton@wsj.com
(END) Dow Jones Newswires
July 26, 2017 13:52 ET (17:52 GMT)