Luxury goods-maker LVMH said that its Wines & Spirits business posted profits of 7% in the first half of the year, however, the group’s US drinks sales were marginally down.
The drinks arm, which includes brands such as Hennessy cognac and Moët & Chandon champagne, posted sales of €2.27 billion in the first half of the year, which was down 1%, however, the business said that organic sales in the division were up 7%.
Innovation Policy
Regarding the performance of its drinks business, LVMH noted that the arm ‘pursued its value strategy based on a strong policy of innovation and targeted investments in communication.
‘In the champagne business, prestige vintages were particularly dynamic, while a firm price-increase policy continued. Europe and Japan progressed, while the United States was in decline due to a delay in shipments,’ it added.
It further noted that Hennessy cognac ‘continued to show strong growth’ in the US market, despite a tighter supply environment there, while its Chinese market ‘continued to develop rapidly’.
Overall Sales Performance
Overall, LVMH recorded revenue of €21.8 billion in the first half of 2018, an increase of 10%, with organic revenue rising by 12%.
The business said that its US, Asian and European operations all experienced ‘good growth’, with profit from recurring operations rising by 28%, to €4.65 billion.
“The excellent results of the first half of the year attest to the strong desirability of our brands and the effectiveness of our strategy,” said Bernard Arnault, chairman and CEO of LMVH. “The performance of the first half is even more remarkable, given the unfavourable currency environment. The standards of quality and creativity required from our maisons, which combine both modernity and tradition, are key to LVMH’s success, always driven by a long-term vision.”
Arnault warned, however, despite buoyant global demand, “Monetary and geopolitical uncertainties remain. In this context, we will stay vigilant and rely on the talent of our teams and the shared entrepreneurial passion to further increase our leadership in the world of high-quality products in 2018.”
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
