LVMH 1st Half Operating Profit Missed But Major Brands Were Resilient -- Earnings Review
July 28 2020 - 6:36AM
Dow Jones News
By Olivia Bugault
France's LVMH Moet Hennessy Louis Vuitton SE reported first-half
results after the Paris market closed Monday. Here's what we
watched:
OPERATING PROFIT: The luxury-goods company said operating profit
fell 68% to 1.67 billion euros ($1.96 billion), below market
expectations of EUR2.69 billion, according to a consensus estimate
provided by FactSet.
REVENUE: The owner of Louis Vuitton posted revenue of EUR18.39
billion, down 28% from EUR25.08 billion a year earlier, but broadly
in line with expectations.
WHAT WE WATCHED:
-ROAD TO RECOVERY: The conglomerate didn't provide guidance for
the rest of the year, citing too many uncertainties ahead due to
the pandemic, and it adopted a cautious but optimistic tone when
talking about the second half in its statement. "After a second
quarter severely affected by the crisis, we can hope that the
recovery will materialize gradually in the second half." Sales
started to recover in June and should show more signs of
improvements in July, LVMH's Chief Financial Executive Jean Jacques
Guiony said during a conference call.
"Beyond slightly disappointing first-half earnings before
interest and taxes, we are convinced that the group will recover in
2H and in 2021 thanks to its iconic brands in each division" Bryan
Garnier said.
- MAJOR BRANDS RESILIENCY: LVMH's major brands were resilient
during the period. Sales growth at Louis Vuitton and Dior were very
buoyant in China and also improved in other regions. "Actually, in
the U.S. and in Japan, June sales at Dior Couture and Louis Vuitton
were respectively higher and stable," BG said. In Europe, sales
weren't as good because of a lack of tourists, it added.
Write to Olivia Bugault at olivia.bugault@wsj.com
(END) Dow Jones Newswires
July 28, 2020 06:21 ET (10:21 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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