Moët Hennessy Louis Vuitton SE, or LVHM, just released its second-quarter figures this week. The French luxury goods conglomerate reported sales numbers that beat initial analysts' expectation, mainly fueled by increased demand for its luxury products and the creative transformations of its popular brands such as Christian Dior and Louis Vuitton.
Overall sales for the company's fashion and leather goods organically increased by more than 20 percent for the quarter when compared to the same period last year. The company's performance for the first half of the year also impressed shareholders, with a 14 percent increase in profits from recurring operations amounting to $5.9 billion.
Despite the global economic slowdown, particularly in its Asian markets, LVMH still invested heavily in its marketing campaigns. The strategy apparently paid off as demand for its products continues to increase. Following the release of its second-quarter earnings, the company stocks jumped by as much as 3.3 percent to a new record high. The increase sent LVMH's market valuation to around $223 billion.
LVHM's accelerated growth can also be attributed to China's push to have its people buy luxury items domestically rather than from abroad. The company has been enjoying sales tax and import duties cuts in China for its various brands, thanks to newly changed policies. Taxes imposed on people bringing luxury items from outside of the country were substantially increased, forcing shoppers to visit stores at home rather than those overseas.
Adding to its successful business in Asia, LVMH also experienced a rebound in sales in Europe. As the effects of the protest and Brexit fears waned, the company saw an uptick in sales in countries such as France. The company's chief financial officer, Jean-Jacques Guiony, mentioned in a conference with analysts that they are actually seeing improvements globally, and not just in China.
The company also attributed its success this year to key designer reshuffles, particular for its Christian Dior and Louis Vuitton brands. Heading its Christian Dior brand is new designer Kim Jones, which had won over fans by reworking the brand's classic products. Meanwhile, Louis Vuitton's new designer Virgil Abloh managed to elevate the brand into new heights with new collections and products.
According to the company's chairman, Bernard Arnault, the consistent refreshing of creativity within the firm was the main key for its success. Arnault recently took the thrown from Microsoft founder Bill gates to become the second richest person in the world. The French business magnate currently has a net worth of around $108 billion, according to Forbes Magazine.
