THE WHAT? LVMH has published its results for the second quarter and first half of fiscal 2020. The luxury goods behemoth saw revenue plummet 38 percent over the second quarter compared to the same period in 2019, contributing to a 27 percent drop in revenue year-on-year over the first six months of the year. Profit also nose dives, falling 68 percent yoy to €1,671 million.
THE DETAILS Nonetheless, the owner of luxury label Fendi said that it had shown ‘good resilience’, that there were encouraging signs of recovery, particularly in China and that profitability of its major brands – namely Louis Vuitton, Christian Dior and Moet Hennessy – remained high.
In terms of category, the perfumes and cosmetics unit saw sales drop 29 percent while fashion and leather goods performed slightly better with sales down 23 percent (reported). The selective retailing division, which includes Sephora, saw sales dive 32 percent.
THE WHY? Bernard Arnault, Chairman and CEO of LVMH, explained, “LVMH showed exceptional resilience to the serious health crisis the world experienced in the first half of 2020. Our Maisons have shown remarkable agility in implementing measures to adapt their costs and accelerate the growth of online sales. While we have observed strong signs of an upturn in activity since June, we remain very vigilant for the rest of the year. We continue to be driven by a long-term vision, a deep sense of responsibility and a strong commitment to environmental protection, inclusion and solidarity. In the current context, we remain even more firmly dedicated to showing continuous progress in these areas. Thanks to the strength of our brands and the responsiveness of our organization, we are confident that LVMH is in an excellent position to take advantage of the recovery, which we hope will be confirmed in the second half of the year, and to strengthen our lead in the global luxury market in 2020.”