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LVMH's core fashion and leather goods division has returned to sales growth for the first time in two years, driven by a strong performance in the US market and a resurgence in demand for the Dior brand under the direction of its new creative director, Jonathan Anderson. The Paris-listed company's fashion and leather goods business posted a 1% year-on-year increase in organic revenue for the second quarter, reaching €8.9 billion, slightly below the average analyst consensus. Following seven consecutive quarters of declining revenue, which was pressured by geopolitical turmoil and significant price hikes from LVMH and other top luxury brands, this growth marks a halt to the prolonged downturn.
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LVMH Chief Financial Officer Cecile Cabanis stated that sales volumes for both Louis Vuitton and Dior increased in the second quarter. The growth rate for Louis Vuitton was in line with the overall division, while Dior's growth was "slightly above the division average." Facing intense competition from Chanel, Anderson is under pressure to quickly attract consumers. Cabanis noted that after the full rollout of Anderson's new collection in stores, sales of Dior handbags and ready-to-wear lines saw a significant boost. Dior recorded double-digit sales growth in the US and Japan, a performance Cabanis used to counter the industry's "zero-sum game" narrative between luxury brands. "As long as there is wealth growth, it will drive demand for luxury consumption," Cabanis said, pointing out that the artificial intelligence boom has strengthened stock markets in the US and South Korea, thereby boosting luxury spending.
LVMH Group's total organic sales for the second quarter rose by 3% to €19.5 billion, outperforming market consensus. Due to currency fluctuations, the group's recurring operating profit for the first half of the year fell by 4% to €8.7 billion, but its operating profit margin remained stable at 22.5%. On the same day LVMH released this latest earnings report, Group CEO Bernard Arnault made his first post on the X platform on Monday. After previously criticizing several media reports, he used this post to thank supporters for their messages. The reports in question alleged internal conflicts within the Arnault family and detailed his vast influence both inside and outside LVMH. Arnault wrote, "The outside world seems to view me as the patriarch of 'France's last royal family.'" He added, "Those media outlets that hope for our family's dissolution and rely on such reports to boost sales can save their energy; they will likely have to wait a long time for that wish to come true."
Cabanis stated that the Middle East conflict reduced organic growth by 1 percentage point in the quarter, with tourist traffic recovering slowly in major commercial shopping districts of the Gulf region. Driven by the Tiffany & Co. and Bulgari brands, LVMH's jewelry and watch division saw sales rise by 11% in the second quarter. The group's previously underperforming wine and spirits division also showed improvement, with strong demand for champagne and rosé wine driving a 5% increase in quarterly sales. Cabanis revealed that demand in the US market remains sluggish.