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With Help From Louis Vuitton, LVMH Profits Rise 41 Percent in the First Half of 2018

Louis Vuitton continues to be a cash cow, with lots of excitement around Virgil Abloh's menswear debut.
Louis Vuitton Men's Spring 2019 show. Photo: Bertrand Guay/AFP/Getty Images

Louis Vuitton Men's Spring 2019 show. Photo: Bertrand Guay/AFP/Getty Images

This year has been very kind to French luxury conglomerate LVMH so far. With organic revenue growth of 12 percent to €21.8 billion and net profit growth of 41 (!) percent, the company's numbers for the first half of 2018 were equivalent to its numbers for all of 2010, a spokesperson noted during the earnings conference call Tuesday.

Sales were up across the board — in all regions and in all product categories (which include wines & spirits, fashion & leather goods, perfumes & cosmetics, watches & jewelry and retail). In fashion, our primary interest, revenue was up 25 percent on a reported basis, 15 percent organic, and profits were up 27 percent, mostly thanks to its eternal cash cow Louis Vuitton. Executives attribute its success to the right combo of "tradition and modernity." Yes, its iconic, classic products are still doing well, but new, innovative designs by Nicolas Ghesquiere are important as well.

Speaking of new, Virgil Abloh's first designs as men's artistic director aren't yet for sale and thus not reflected in the latest sales results, but executives did bring up his "exceptional welcome" and "substantial media coverage." (No word though on the specific impact of Abloh's viral embrace with Kanye West at his show last month.) But given the success of Louis Vuitton x Supreme last year, the hypebeasts can be counted on to show up when Abloh's designs hit stores as well.

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All of the new talent at LVMH luxury houses received mention, including Kim Jones's first collection for Dior Homme being "well-received," and the Hedi Slimane at Céline announcement receiving "positive attention" (debatable). In addition, the "high visibility" of Meghan Markle's Clare Waight Keller-designed Givenchy royal wedding dress was a big win.

As usual, mention of Marc Jacobs's performance was glazed over, with the spokesperson saying only that "restructuring progress" was being made. Pressed by an analyst during the Q&A portion of the call, he said that while the brand lost money, it lost less money than it had last year. So that's something!

Overall, there are a lot of changes in the works at LVMH and the company isn't resting on its laurels. "Despite buoyant global demand, monetary and geopolitical uncertainties remain," said CEO Bernard Arnault in a statement. "In this context, we will stay vigilant and rely on the talent of our teams and the shared entrepreneurial passion to further increase our leadership in the world of high quality products in 2018."

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