LVMH sales jumped in the second quarter as the owner of Louis Vuitton bags and Dom Perignon Champagne continued to thrive despite lockdowns in China and soaring inflation.
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Organic revenue in the French company’s key fashion and leather goods unit soared 19%, compared with estimates of a 17% rise, according to analysts surveyed by Bloomberg. In addition to Louis Vuitton, brands such as Fendi, Dior and Celine helped drive the uplift, the company said in a statement Tuesday.
The world’s largest seller of luxury goods followed Richemont and Burberry Group Plc in posting results that show the appetite for luxury goods remains even as prices increase, the global economic outlook deteriorates, and China continues to pursue its Covid-zero policy.
Consumers in the US and Europe have stepped up spending on luxury items as China remains subdued. LVMH’s update also demonstrates that well-heeled customers are not yet feeling the effects of a global surge in inflation that’s causing shoppers with smaller budgets to rein in spending at retailers such as Walmart Inc.
“We approach the second half of the year with confidence, but given the current geopolitical and health situation, we will remain vigilant,” chief executive officer Bernard Arnault said in the statement.
LVMH’s wines and spirits division, which has suffered some supply constraints in the past, bounced back with organic revenue jumping 30%, helped in particular by demand for Champagne in Europe, the US and Japan but also price increases for its Hennessy Cognac.
First-half profit from recurring operations rose to 10.24 billion euros ($10.35 billion). Analysts expected 9.51 billion euros.
Louis Vuitton, which was likely the biggest profit driver last year according to HSBC, maintained its profitability “at an exceptional level,” during the first half, the statement added.
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