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LVMH CEO and Chairman Bernard Arnault says that the company showed exceptional resilience to the serious crisis the world suffered in the first half of 2020.
After the market closed on the 27th of July, LVMH Moët Hennessy Louis Vuitton revealed its financial results for the first half of 2020. The persisting coronavirus pandemic affected LVMH, causing losses in the year’s first half results. The French multinational corporation reported revenue of 18.4 billion euros, a 27% decline over the first half of 2019.
LVMH First Half Earnings Results
At the beginning of the coronavirus lockdown, LVMH released its first-quarter results which showed a decline in sales. According to the report, LVMH lost a total of 15% in revenue. In organic revenue, Perfumes and Cosmetics reduced 19% while Fashion and Leather Goods declined 10%. Also, Wines and Spirits fell 14%. Topping the list of declines are Watches and Jewelry, along with Selective Retailing, as each plunged 26%.
According to the first half report by the company, revenue in the second quarter, per organic basis, was down 38%. In organic growth, Wines and Spirits reduced by 33%, while Watches and Jewelry dropped by 52%. Furthermore, the report shows a decline in the organic growth of Fashion and Leather Goods by 37% and Perfumes and Cosmetics by 40%. Selective Distribution also fell by 38%. However, despite a revenue fall in the US, and Europe, Asia seems to be recovering with China’s resilience.
More on LVMH’S 2020 First Half Earnings
For the 2020 first half, Christian Dior, Moët Hennessy and Louis Vuitton still stand high in profitability. Profits from recurring operations totaled 1671 million euros, a 68% loss over 2019’s first half gains. In addition, the net cash from operating activities is also down by 80%. The report shows that total sales were down 15% against the first quarter of the previous year. As the global lockdown eases, LVMH Moët Hennessy Louis Vuitton is rebounding from an increase in online sales.
Chairman and CEO of LVMH, Bernard Arnault, commented on the company’s performance in the first half of 2020:
“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.”
This year, MarketWatch shows that LVMH lost almost 3%, a 2.35% decline in the last five days. However, in the last three months, the company’s stock jumped 16%, and 3.395% in the past month. Overall, LVMH has increased by 5.92% in the last year. Currently, LVMH’s stock is closed at 402.85 Euros, a 1.23% gain over its last close of 397.95 Euros.
Considering the company’s losses for the first half of the year, the report shows that LVMH hopes to recover gradually in the second half of the year. The company is confident it will “reinforce LVMH’s global leadership position in luxury goods once again in 2020.”