Jul 27, 2021
LVMH first-half profits soar on rebound from pandemic
Jul 27, 2021
LVMH, the world's leading maker of luxury goods, said Monday that sales and profits had bounced back strongly in the first six months of 2021 as demand soared after the pandemic-induced slump last year.
LVMH, whose brands include Moet and Louis Vuitton, said its first-half profit had gained substantially from the level in 2019, and was far above the first half of 2020 that was marred by lockdowns worldwide.
"LVMH has enjoyed an excellent half-year and is reaping the benefits of having continued to innovate and invest in its businesses throughout the pandemic despite being in the midst of a global crisis," chief executive Bernard Arnault said in a statement.
"Within the current context, as we emerge from the health crisis and see a recovery in the global economy, I believe that LVMH is in an excellent position to continue to grow and further strengthen our lead in the global luxury market in 2021," he added.
The group's bottom-line net profit soared to 5.3 billion euros ($6.3 billion) in the period from January to June. That is a 10-fold increase from the corresponding period a year earlier, and a 62-percent rise compared with the first half of 2019.
First-half revenues were up by 53 percent on a 12-month basis, outpacing analysts' expectations.
Underlying or operating profit quadrupled to 7.6 billion euros.
"The first half of this year marks a return to strong growth momentum after a severely disrupted year in 2020 resulting from the global pandemic," the group's statement said.
In particular, strong sales were recorded by the group's fashion and leather goods lines, notably Louis Vuitton, Christian Dior, Fendi, Loewe and Celine.
In geographical terms, Asia and the United States posted stronger rebounds than Europe, while a look at the business side showed that US jeweller Tiffany was being successfully integrated.
"The pandemic belt-tightening is over and LVMH's customers have been splashing out on the little luxuries in a post-crisis splurge," said Susannah Streeter, an analyst at Hargreaves Lansdown.
She noted that "there had been some groomed eyebrows raised at the eye-watering debt pile raised by the acquisition of Tiffany's, particularly given the bitter spat over the price tag."
But the brand has done well, Streeter said.
Finally, "corks were also popping at the wine and spirits arm, with revenue growth of 12 percent compared to 2019," as champagne and cognac found favour again, the analyst concluded.
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