First half net profit plunges 22% at French luxury group LVMH
Though sales fell four percent to just under 40 billion euros (47 billion dollars), chairman and CEO Bernard Arnault insisted that LVMH 'is demonstrating its resilience in the current context'.
The producer of Louis Vuitton bags and Dom Perignon champagne has been hit especially hard by US President Donald Trump's threat of tariffs, as it generates a quarter of its revenue in the United States.
In the wake of the US president's April 2 'Liberation Day' tariff announcements, Arnault, Europe's richest man, saw Hermes overtake LVMH as the world's most valuable luxury company.
Trump imposed a 10-percent tariff on imports from around the world that month, but he delayed higher duties on dozens of other countries, with an August 1 deadline to strike trade deals or face tougher levies looming.
'We are approaching the second half of the year with great vigilance, and I am confident in LVMH's formidable long-term potential,' Arnault, who was present at Trump's second inauguration in January, said in Thursday's press release.
Though LVMH has likewise been hit by a trade dispute over European brandy exports to China, a key market for its Hennessy cognac, Chief Financial Officer Cecile Cabanis said the group had seen 'improved demand from the Chinese in China'.
But 'currency exchange effects have led to an extremely sharp drop in demand' from Chinese tourists visiting Japan, she told the press.
Both the wine and spirits and fashion departments posted eight-percent drops in revenue, to 2.6 and 19 billion euros respectively.
The former was weighed down by 'the impact on customers of trade tensions weighing on the key US and Chinese markets', the results announcement added.
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