Dive Brief:
- LVMH reported a robust first half during its earnings call on Tuesday, with revenue up 15% to 42.2 billion euro, or $46.7 billion at current exchange rates.
- The company’s fashion and leather goods business, which includes Louis Vuitton, Christian Dior, Celine and Fendi, reported an organic revenue growth of 20%, with profit from recurring operations up 14%. In particular, Louis Vuitton saw “an excellent first half,” driven in part by Pharrell Williams, its new men's creative director, whose debut show drew more than 1.1 billion social media views, per a release about the earnings.
- All LVMH groups saw double-digit organic revenue growth over the half year except its wines and spirits division, and second quarter organic revenue growth was 17%.
Dive Insight:
During its earnings call, the company also touted the success of its Christian Dior brand, and in particular the popularity of its Lady Dior bag, which was featured in a Christian Dior exhibition at the Tokyo Museum of Contemporary Art. Earlier this month, Dior raised prices on handbags globally after previously announcing a price hike for European Dior bags in January.
On Monday, LVMH also announced it had signed on to become a premium partner of the Paris 2024 Olympic and Paralympic Games.
For the first two quarters of 2023, LVMH saw its operating cash flow more than halved to 1.8 billion euros from 4 billion euros year over year, which it said was a result of major real estate investments and operational inventories. That included the opening of Loewe’s Casa Dubaï, Fendi’s new stores in Seoul and Tokyo, plus the reopening of its flagship Tiffany & Co. store in New York City. In addition, WWD reported that LVMH bought the building at 101 Champs Elysées, where its flagship Paris Louis Vuitton store is located, for an estimated 770 million euros. That reporting was based on news from French real estate publication CFNews Immo, although LVMH has declined to comment on the deal.
Meanwhile, group net profits rose 30% for the half to 8.5 billion euros, and the company touted strong growth of its business in Europe and Asia.
“LVMH achieved outstanding results during a six-month period of ongoing economic and geopolitical uncertainty,” Bernard Arnault, LVMH chair and CEO said in a statement. “The strong creative momentum and excellent distribution of our Maisons continued to inspire dreams, as demonstrated by the enthusiastic reception given to Pharrell Williams’ first fashion show for Louis Vuitton as well as the reopening of the New York “Landmark” of Tiffany & Co.”
He added that the French luxury firm continued to see progress in relation to its “environmental, social and societal efforts” including a plan intended to reduce its overall water consumption footprint by 30% by 2030.
“Thanks to the desirability of our brands, we approach the second half of the year with confidence and optimism but will remain vigilant within the current environment and count on the agility and talent of our teams to further strengthen our global leadership position in luxury goods in 2023,” said Arnault.
On the call, Christopher Hollis, director of financial communications, also announced his retirement after spending 23 years with LVMH.
“In corporate life, it has been my honor and pleasure to spend the last 23 years with LVMH, which has been a period of enormous growth and success for the group on a global basis,” said Hollis on the call. He will be replaced by Rodolphe Ozun, the current deputy director of financial communications.
Earlier this year, LVMH said it would name a new head of its Fashion Group division after Sidney Toledano, who has been with the company since 1994, moves to a different role within the French luxury conglomerate. Arnault did not name a successor.
LVMH’s fashion division reported record-level 20% organic revenue growth in 2022. Earlier this year, Arnault, who is the world’s richest man, additionally saw his personal wealth grow to over $200 billion.
