MC Lvmh Moet Hennessy Louis Vuitton SE

By Cristina Roca

France's LVMH Moet Hennessy Louis Vuitton SE (MC.FR) reported first-half results Wednesday afternoon. Here's what we watched:

OPERATING PROFIT: The luxury-goods titan said operating profit came to EUR5.30 billion, slightly short of a EUR5.37 billion consensus estimate provided by FactSet.

REVENUE: The owner of Louis Vuitton posted revenue of EUR25.08 billion, up 15% year-on-year and above analysts' expectations of EUR24.77 billion, according to a consensus estimate provided by FactSet.

WHAT WE WATCHED:

-FASHION & LEATHER GOODS: The group's key fashion-and-leather goods division had been broadly expected to post strong results. It outdid those high expectations, with revenue in the division accelerating to 20% organic growth in 2Q, led by Louis Vuitton and Dior.

-MARGIN: LVMH's operating margin shrank by 30 basis points. While the market had anticipated currency hedging to be a drag, margins also came under pressure due to reinvestment, which was stepped up to promote further growth, RBC analyst Rogerio Fujimori said. "These investments are paying off hence the sales growth acceleration," Bryan Garnier analyst Loic Morvan noted.

-GOOD NEWS FOR THE SECTOR: LVMH's 2Q trends confirm that, "despite an increasingly demanding comparison basis and some macro uncertainties, the luxury goods industry remains buoyant," Morvan said.

Write to Cristina Roca at cristina.roca@dowjones.com; @_cristinaroca

(END) Dow Jones Newswires

July 25, 2019 05:44 ET (09:44 GMT)

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