The world’s largest luxury group by revenue, Moët Hennessy Louis Vuitton (BIT: LVMH) reported strong second-quarter sales, as the luxury firms capitalized on strong accelerating Asian demand, assuaging investors’ concerns about a slowdown in the crucial region.
Sales in Asia (excluding Japan) rose by 18%, lading the like-for-like sales at LVMH to rise by 12% in the quarter, to EUR 12.5 Billion. Indeed, despite of the trade war between China and the US that could weigh on consumer sentiment, The company faces high demand across Asia, particularly in mainland China.
For the first time, LVMH’s sales crossed the EUR 25 Billion mark with overall sales for the first six months of the year of EUR 25.1 Billion. Operating profits surpassed EUR 5 Billion for the first time and amounted exactly EUR 5.3 Billion. Net profit was slightly below analyst expectations of EUR 3.5 Billion but increased 9 % and reached EUR 3.3 Billion. The company pointed out outstanding performances at the Louis Vuitton and Christian Dior Couture brands and sales of its Sephora cosmetics business were up 7%.
Sales not only increased in Asia but in the US, in Japan and Europe as well. In Japan, sales were up 11%, 8% in the US and went from 7% growth in the first quarter to 13% for the three months to the end of June in Europe, this is mostly due to the impact of the “gilets jaunes” anti-government protests that occurred in France at the start of the year.
“In a nutshell, LVMH’s equity story remains intact - leadership market positions, broad-based market share gains, relatively stable earnings profile thanks to the quality of its assets, portfolio diversification and geographical balance, and great management team,” wrote RBC Capital Markets.