LVMH Moët Hennessy - Louis Vuitton, Société Européenne LVMHF

The business

LVMH owns roughly 75 luxury houses across five groups, and one of them is the company. Fashion and Leather Goods, which is Louis Vuitton, Dior, Loro Piana, Celine, Fendi and Loewe, generated €18.14B of first-half revenue, 47% of the group, and €6.2B of profit from recurring operations, which is 71% of all group profit at a 34.1% margin against 22.5% for the group. Watches and Jewelry, mostly Tiffany and Bulgari, is €5.22B of revenue and €831M of profit. Selective Retailing, which is Sephora and DFS, is €8.40B of revenue and €893M of profit, so it carries 22% of revenue and 10% of profit. Wines and Spirits, the Moët Hennessy side, contributed €582M. When people say LVMH, the financial statements say Louis Vuitton and Dior.

What the headline decline hides is that the shape of the business changed direction this half. Group revenue fell 3% reported but rose 2% organic, and the second quarter accelerated to 3% organic, or 4% excluding the Middle East conflict. Inside that, Fashion and Leather Goods returned to 1% organic growth in the second quarter after a 2% organic decline in the first, its first increase in two years. Watches and Jewelry grew 9% organic across the half and 11% in the second quarter. The reported numbers are worse than the underlying ones because the euro moved against LVMH, and management attributes more than the whole of the Fashion and Leather Goods margin decline to currency. So the operating business inflected while the translated numbers still fell.