Cosmetics and fragrance help lift LVMH sales

By Simon Pitman contact

- Last updated on GMT

Cosmetics and fragrance help lift LVMH sales

Related tags: Asia pacific region, Lvmh

A strong performance from cosmetics and fragrances, as well as retail division Sephora, helped buoy group sales that have been hit by poorer sales in the domestic market, France.

LVMH reported record revenue of €17.2 billion in the first half of 2016, which represented an increase of 3% on a like-for-like basis and organic growth of 4%.

The company said that the US market continues to be dynamic, while the European market remains on track, with the exception of France, which has been hard hit by a significant drop in revenue from decreased tourism. Likewise, the Asia Pacific region continued to grow steadily.

The figures for the second quarter showed that like-for-like revenue grew by 2%, while organic revenues grew by 4%.

Business diversity helps results

Although the drop in revenues seen in the mainstay France market hurt the company, executives believe that their global and diversified product portfolio helped to avoid any serious impact.

“The diversity of our businesses, the entrepreneurial style of our brands and the agility of our organization all contribute to the growth of the Group,”​ said Bernard Arnault, Chairman and CEO of LVMH.

“By remaining vigilant, we face the second half of the year with confidence and count on the quality of our products and the talent of our teams to further strengthen our leadership in the world of high quality products in 2016."

Cosmetics and perfumes

Sales of the company’s own brand cosmetic and fragrances increased by 5% on a like-for-like basis over the first six months of the year to reach €2.34 billion, an increase of 8% in organic terms.

The company said that Christian Dior made market gains in every region, driven by launches such as Sauvage and the continued popularity of its iconic fragrances.

The company also noted the addition of Guerlain’s  Petite Robe to the makeup market, as well as Benefit’s new eyebrow collection and the continued growth of the Makeup Forever and Kendo brands.

Sephora still on fire

Selective retailing, which includes Sephora revenues, rose by 4% over the first six months of the year to reach €5.48bn, an increase of 5% in organic terms.

The company said that Sephora continued to gain market share in all regions, recording double digit-growth in its revenue and profits.

Looking ahead to the rest of the financial year 2016, company executives stated their belief that gains in market share and additions to the product portfolio would continue to strengthen the company’s performance, despite geopolitical and currency uncertainty.

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