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LVMH Profits Slip

by Deidre Woollard (RSS feed)
Jul 28th 2009 at 12:47AM

bernard arnaultLVHM released their most recent numbers on Monday, a little ahead of schedule, showing that first-half net profit for the luxury good retailer fell 23 percent. LVMH products span a wide range in the luxury market and different groups within the company have had differing results. Watches and jewelry were particularly hard hit reporting that profit from recurring operations fell 73 percent. Better but still slumping was the wine and spirits division with a 41 percent slip. Fashion and leather goods were a bright spot with a seven percent increase in profit from recurring operations.

LVMH posted a net profit of 687 million euros in the six months through June, which is down from 891 million euros a year earlier. As you might expect the economy has been cited as a reason for the decline but the company also said that heavy destocking by its third-party distributors in the wine and spirits and jewelry and watches businesses played a role in the decline.

The company predicts that it will continue to gain market share even in a shrinking market. Businessweek has a quote from Bernard Arnault, chairman and CEO of LVMH, shown at right who said that the results were "particularly remarkable given the global economic crisis" and that LVMH is approaching the second half of the year "with confidence."

Tags: bernard arnault, BernardArnault, lvmh, profits, stocks

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