Paris–The strong performance of Bulgari watches and jewelry plus TAG Heuer’s smartwatch helped drive a decent first half for LVMH.
Overall, the Paris-based luxury group saw sales rise but profits were flat, and regions outside the United States struggled.
LVMH Moët Hennessy Louis Vuitton reported Wednesday that revenue for its Watches & Jewelry group increased from $1.71 billion in the first half of 2015 to $1.78 billion this year. It was an increase of 4 percent on both a reported and organic basis.
First half group profit was flat at $276.3 million.
LVMH mentioned both Bulgari and TAG Heuer when commenting on its results, stating that there was a “successful refocusing” of TAG Heuer’s core product range and an “excellent response” to new watches in some of its most popular lines, Carrera, Aquaracer and Formula 1.
The brand’s smartwatch, the “Connected,” which came out in November 2015, also continues to do well. LVMH said TAG has doubled its production capacity for the timepiece.
The performance of Bulgari was “well above the market,” driven by the success of the B Zero I and Diva lines and the reopening of the brand’s store on Bond Street in London.
LVMH said it is opening a new Bulgari jewelry workshop in Valenza, Italy.
The performance of Watches & Jewelry was in line with that of other segments of LVMH’s business, none of which had first half revenue growth that exceeded single digits.
The strongest-performing group, Wines & Spirits, recorded organic revenue growth of 9 percent while Perfumes & Cosmetics reported an 8 percent year-over-year increase in sales.
Revenue was up 5 percent for Selective Retailing, which includes experience-focused cosmetics chain Sephora, and was flat for Fashion & Leather Goods.
Region-wise, the United States was the second-largest market for the Paris-based luxury goods group, comprising 26 percent of total revenue in the first half of the year. Only Asia (excluding Japan) was bigger, at 28 percent.
The U.S. also was the strongest performing market for LVMH in the period, with year-over-year organic revenue growth of 7 percent. Sales were flat in Japan and Asia and up 5 percent in Europe.
Total revenue for LVMH was up 3 percent, from $18.47 billion to $19 billion.
Profit from recurring operations was flat.
The company said it has “confidence for (the remainder of) 2016, despite an uncertain economy (and) monetary and geopolitical context.”