French luxury goods maker LVMH Moet Hennessy Louis Vuitton said Friday that first-half profit rose 24%, driven by its leather goods and lower financial costs.

LVMH said net profit for the first six months of 2003 was 265 million euros ($297 million), up from euro214 million for the same period last year.

Revenue fell 10% to 5.24 billion euros ($5.86 billion) from 5.82 billion euros a year ago.

The luxury goods company said that operating profit rose 4% to 874 million euros ($980 million). Among its dozens of brands, LVMH operates fashion houses such as Italy’s Fendi, France’s Christian Lacroix and New York-based Donna Karan.

But its watches and jewelry business struggled in a weak market, with an operating loss that widened to 38 million euros ($42.5 million) from 7 million euros a year ago.

Vuitton leather goods brands typically generates about two-thirds of the company’s overall profit.

Meanwhile, operating profit from wines and spirits jumped 16% to 321 million euros ($360 million), with strong performances by Moet & Chandon and Veuve Clicquot champagnes in Britain and Japan, LVMH said.

LVMH cut costs in its selective retail segment, featuring duty-free stores operator DFS. That segment cut its operating loss to 15 million euros ($16.8 million) in the first half from 39 million euros last year.

LVMH said that sales trends in July and August “confirm the signs of recovery observed in June in the majority of our activities.”

The company said it still expects “tangible growth in operating profit” for the full year, with a series of new product launches planned for the second half.

JCK