Home / Business and Economy / LVMH Weathers Profit Dip, Sees Brighter Days Ahead
LVMH Weathers Profit Dip, Sees Brighter Days Ahead
25 Jul
Summary
- LVMH's net profit fell 22% in first half, but other divisions beat expectations
- Luxury group plans to open new Louis Vuitton factory in Texas
- LVMH stock up 3.9% as analysts foresee earnings recovery
The French luxury conglomerate LVMH Moët Hennessy Louis Vuitton recently reported its first-half financial results, which saw the company's net profit decline by 22% to 5.7 billion euros. This was primarily due to weaker performance in the group's key fashion and leather goods division, which includes brands like Louis Vuitton, Dior, and Celine, as well as a plunge in sales in Japan.
However, LVMH's other divisions either beat or were in line with expectations, and the company's stock price ended the day up 3.9% to 488.70 euros. Analysts at Deutsche Bank have expressed optimism, stating that they believe an earnings trough is now approaching for the luxury giant.
LVMH's executive chairman, Bernard Arnault, has been working to navigate various headwinds, including the threat of U.S. tariffs on European goods. Despite the recent profit decline, Arnault has announced plans to open another Louis Vuitton factory in Texas, signaling the company's continued commitment to expansion. Additionally, Arnault has stated that he has no plans to sell LVMH's wines and spirits division, which has been underperforming.
Overall, while LVMH faced challenges in the first half of the year, the company's diversified portfolio and strategic initiatives appear to have instilled confidence in investors, who are now viewing the risk-reward proposition more favorably.
