China boosts LVMH profits

1 August 2018

Luxury brand Louis Vuitton Moet Hennessy (LVMH) has announced an increase in profits for the first half of 2018. The latest company statement reveals that profit for 2018 increased by 41.2% to €3bn. Revenues increased by 10.3% from the same period last year. For the second quarter, the company's revenues increased by 11%.

Meanwhile profit from recurring operations for H1 2018 was €4.6bn, up from €3.6bn a year earlier.

Meanwhile, revenues rose to €21.75bn, while LVMH’s profit margin rose to 21.4% compared to 18.5% a year ago. The company said its healthy profits were in part due to Chinese shoppers maintaining their demand for luxury products. However, LVMH CEO Bernard Arnault voiced caution over the threats surrounding global trade brought about by Donald Trump’s confrontational approach. “Despite buoyant global demand, monetary and geopolitical uncertainties remain,” he said.

Ultimately, LVMH says it is confident it can ride out the storm. “The threats...are there but I don’t think they have materialised yet in any way,” Jean-Jacques Guiony, chief financial officer, told a conference call with analysts, referring to currency volatility and the fallout from trade tensions.

 “Although the luxury industry is not on the frontline on this, such a risk would certainly bear some negative consequences for us,” Guiony admitted. LVMH’s leather division was especially buoyant.

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