By Nadya Masidlover
PARIS--Luxury goods giant LVMH Moet Hennessy Louis Vuitton SA (MC.FR) said Thursday it has entered the second half of the year with confidence as it reported a jump in first-half profit, in a release that may calm concerns that demand for designer handbags and high-end clothes is beginning to cool.
The chief executive of the world's biggest luxury retailer by revenue, Bernard Arnault, expressed confidence about 2012, saying that the company plans to "pursue further market share gains in our historical markets as well as in high potential emerging markets."
Europe's luxury goods companies have appeared immune to the economic downturn in recent years, with sales driven by soaring demand in emerging markets and from tourists buying luxury goods in Europe. Yet signs of an economic slowdown in China--a key market for luxury goods--have raised questions over the sustainability of the boom.
These concerns were borne out in Burberry Group PLC's (BRBY.LN) full-year results in May, which showed evidence of a slowdown in Asian revenue growth. And this month, the chief executive of Cartier, the watch and jewelry brand owned by Compagnie Financiere Richemont SA (CFR.VX), said demand in China was slowing.
The Paris-based company posted net profit growth of 28% from a year earlier to 1.68 billion euros ($2.07 billion) in the first half, beating expectations.
Sales rose 26% to EUR12.97 billion, supported by demand in Asia, Europe and the U.S. The figure topped expectations of a FactSet poll.
LVMH's fashion and leather goods division, home to the company's star brand, the monogrammed handbag maker Louis Vuitton, put in a solid performance. Yet organic revenue growth came out at 10% over the half-year, implying a slight slowdown in the second quarter from the first, when on-year growth reached 12%.
LVMH shares closed Thursday at EUR124.90.
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(END) Dow Jones Newswires
July 26, 2012 12:40 ET (16:40 GMT)
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