LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury products group, on Wednesday reported that net profit grew 46 percent compared to the first half of 2005, attributing the growth to improved operating profitability and financial results.
Net profit totaled more than a $1 billion, up from $716 million in the same period of the previous year.
Each of the business groups recorded at least double-digit growth in profit from recurring operations, a performance which is even more noteworthy in view of the strong growth in the first half of 2005. The Watches & jewelry group reported a 164 percent increase in profit for the period.
The luxury goods company reported a 19 percent increase in profit from recurring operations during the first half of 2006 and a 35 percent increase in operating profit. Revenue for the period rose 13 percent to nearly $9 billion.
“Our performance during the first half of the year once again demonstrates the exceptional appeal of our brands as well as the coherence and effectiveness of our strategy,” said Bernard Arnault, chairman and CEO of LVMH. “Revenue growth over the summer has continued the trend we saw at the beginning of the year.”
Watches & Jewelry has seen a strong rise in its results, more than doubling its recurring operating margin, which now exceeds 10 percent, LVMH reported. TAG Heuer had strong growth during the period in both revenue and profit. The brand highlighted its move towards the high end of the market with its Carrera, Link, and Aquaracer lines and made significant gains in market share. Zenith had good momentum with the successful launch of Class Open. Montres Dior confirmed the considerable success of the Christal line. Chaumet continued to advance with the success of the automatic watch Dandy.
Profit in its other business groups are as follows:
* Wines & Spirits, 11 percent
* Fashion & Leather Goods, 13 percent
* Perfumes & Cosmetics, 80 percent
* Selective Retailing, 24 percent
The company said revenue in July and August 2006 confirms the continuation of the its growth trend experienced since the beginning of the year and that the growth will continue for the fiscal year.
“Numerous product launches alongside growth of our core brands, both in our traditional markets and in the emerging countries, should allow LVMH to continue its progress in the second half of the year in a well oriented economic environment,” Arnault said. “All these elements enable us to confirm our objective of a very significant increase in results for 2006.”