What Is The Doorway Of The First Half Year's Earnings Of Luxury Goods?

LVMH

LVMH, a luxury group in France, continued to grow well in the first half of 2019.

LVMH group released its semi annual report for fiscal year 2019 in July 24th. In the three months ended June 30th, group revenue rose 15% to 12 billion 540 million euros, exceeding expectations.

In the first half of 2019, LVMH group revenue rose 15% to 25 billion 100 million euros, operating profit rose 14% to 5 billion 295 million euros, and net profit rose 9% to 3 billion 268 million euros.

The fashion and leather sectors including Fendi, Dior and Givenchy have been growing rapidly. Sales in the second quarter increased by 20% to 5 billion 310 million euros, and sales in the first half of 2019 rose 21% to 10 billion 425 million euros. This sector has made breakthroughs in the annual report for the first time in the first half of this year.

LVMH group points out that in the best performing fashion and leather sector, Louis Vuitton has achieved significant growth in all areas, and men's and women's fashion shows have received positive feedback. Christian Dior's new 30 Montaigne handbag has achieved excellent sales results, Loro Piana's personalized shoe service and New York's temporary stores have achieved steady growth.

In the first half of the year, the brands of perfume cosmetics and franchised retail brands all recorded a 12% increase in fashion and leather goods sectors. The growth of liquor brand and jewellery watches brands increased by 9% and 8% respectively.

LVMH Group Chairman and CEO Bernard Arnault said in the announcement that although the market demand for brands continues to rise, the group will continue to control costs and remain vigilant in the second half of 2019.

In fact, earning more LVMH is also increasing investment in its brand. LVMH in the first half of 2019, spending on marketing and shops increased by 15%.

Jean-Jacques Guiony, chief financial officer of LVMH group, said in a conference call that when the company's business performance is excellent, the group will invest more in the brand, not only to support the existing growth momentum, but also to make the brand more flexible when the global environment becomes more and more difficult, and this investment is to strengthen the correct decision of the future strategic value of the brand portfolio.

In July 15th, LVMH group announced that it signed cooperation with the designer brand Stella McCartney of Kai Yun group to acquire some equity stake in the brand. In May, LVMH announced that it would jointly create a new brand Fenty with American singer Rihanna, and gave the brand name "Jean" Patou a brand name "Patou", a brand new Logo and a new school image. In September, Patou will be back in Paris fashion week after 22 years away from the high fashion industry.

Rogerio Fujimori, a luxury analyst at Royal Bank of Canada, said the information released by the LVMH group shows that management wants to accelerate the growth of market share, especially the group's most profitable fashion and leather sector, which will make it even more difficult for smaller competitors in the same field.

LVMH group's brilliant performance has also made the group's stock price rise 47% since the beginning of the year. Arnault has succeeds in becoming a billion dollar millionaire club. Last week, it exceeded Microsoft founder Bill Gate as the second richest in the world.

Moncler group

Moncler group was once predicted by Reuters as the next LVMH, and it issued the 2019 financial year semi annual report on the same day with LVMH group. Facts have proved that although the size of the Moncler group is still quite different from that of LVMH group, its sustained and steady growth is very bright in the industry.

In the 6 months ended June 30th, Moncler group's revenue rose 16% to 570 million euros, and net income rose 16% to 71 million 300 thousand euros, achieving double-digit growth for 21 consecutive quarters.

In the local market of Italy, Moncler group's revenue rose 8% to 68 million 400 thousand euros in the first half year. Revenues from other parts of Europe, Middle East and Africa rose by 15% to 16 million 900 thousand euros. Britain, Germany and France were the main force of growth. Revenue in the Americas rose 15% to 83 million 500 thousand euros.

Mainland China, Japan and South Korea are the main growth force of Moncler in Asia and other markets around the world, with revenues rising 18% to 249 million euros, accounting for 43.7 in the group.

Moncler's board chairman and CEO Remo Ruffini said in a conference call on Wednesday that the group's performance in the first half of the year exceeded the market and his own expectations, and said that the "Moncler Genius" project continued to achieve very positive results, and half of the new customers were attracted by Genius. "We need to use Genius projects to make customers more loyal. We have evidence that the company is on the right track." Ruffini added.

In the group earnings report, Ruffini admitted that the second half of the year will be an important and challenging 6 months, but he stressed that the company's path is very clear and he is confident about the next half year.

VF Corporation

Vans's parent company Vf Corporation (VF) released its first quarter results in July 24th, and the group's revenue rose 6% to $2 billion 270 million in the three months ended June 29th.

Sales of sports departments including Vans, Eastpak, Kipling and other brands increased by 8% over the same period. The best performing Vans recorded a 20% increase in sales. Outdoor sector revenue, including The North Face, rose 7% compared to the same period last year, of which The North Face rose 9%.

"The first quarter results show the strength of the brand mix after the company upgrade. Because of the strong performance in the first quarter and our confidence in this fiscal year, we have decided to raise the full fiscal expectation for the 2020 fiscal year, including an additional investment of US $20 million for the current fiscal year and the accelerated growth in the future. Wei Fu CEO Steve Rendle said.

Nevertheless, Vf Corporation net income fell from $160 million to $49 million 200 thousand, mainly because the group had stripped the cowboy business.

Vf Corporation is at a critical stage of transformation. In December last year, the company stripped its weaker cowboy business, and the denim brand Lee, Wrangler and Rock&Republic formed a new Kontoor Brands.

Hermes

Hermes rarely released a second quarter performance report earlier than LVMH group, which also exceeded analysts' expectations. Sales in the second quarter rose 14.7% to 1 billion 670 million euros, while sales in the first half increased 15.1% to 3 billion 284 million euros.

The clothing and accessories department is the most prominent Department of Hermes group. Sales of fixed exchange rate rose by 16.9% to 394 million euros, leather sales increased 12.2% to 844 million euros, jewelry and home business sales rose 20.8%, silk and anti sale sales increased 5.8%, perfume sales increased 3.5%, and watches sales increased 7.6%.

Hermes said China's mainland market was particularly outstanding in the first half of 2019, and all countries in Asia recorded double-digit growth.

Like the LVMH group, which is expanding investment, Hermes group is investing more to expand its capacity. In addition to the expanding textile center, Hermes group will open two new leather factories by 2020 to meet the growing demand of consumers. In addition, Hermes cosmetics will be released next year.