LVMH Moet Hennessy Louis Vuitton experienced a decrease in sales during the first half of the year, primarily due to weaker performance in its fashion and wine departments.
The distinguished luxury conglomerate reported a 4 per cent decline in revenue, which totaled EUR39.8 billion (US$46.7 billion) over a six-month period. This figure represents a 3 per cent decrease in sales on an organic basis, including a 3 per cent decrease in the first quarter and a 4 per cent reduction in the second quarter.
The major contributors to this decline were an 8 per cent drop in sales in both the fashion and leather goods division and the wine and spirits division. The group attributes the dip in fashion revenue to the strong growth it enjoyed last year, which was largely spurred by increased tourist spending in Japan, owing to a weaker yen. As for the wine segment, it suffered due to the influence of trade tensions impacting the critical markets of the US and China.
Furthermore, perfume and cosmetics and watches and jewellery departments also reported a 1 per cent decline in sales. In contrast, the selective retailing segment remained flat, a result of continued growth at Sephora and the streamlining of operations at DFS.
In terms of profit, there was a 15 per cent slide in profit from recurring operations which amounted to EUR9 billion, and the net profit was down 22 per cent to EUR5.6 billion.
Despite these figures, the group maintains its confidence in the prevailing uncertain geopolitical and economic climate. It plans to continue focusing on bolstering the appeal of its brands.
What were the major contributors to LVMH’s decline in sales?
The major contributors were an 8 per cent drop in sales in both the fashion and leather goods division and the wine and spirits division.
What factors affected the fashion and wine segments?
The dip in fashion revenue can be attributed to the strong growth it experienced last year due to increased tourist spending in Japan, owing to a weaker yen. The wine segment suffered due to trade tensions impacting the crucial markets of the US and China.
What are LVMH’s plans moving forward amidst the economic downturn?
The group plans to maintain its focus on enhancing the desirability of its brands, expressing confidence in the prevailing uncertain geopolitical and economic environment.
