LVMH sales plummet in H1 due to Covid-19
The wine and spirits arm of LVMH saw profits plunge during the first half of 2020 due to the economic challenges brought on by the Covid-19 pandemic.
Wine and spirits sales fell by 23% on an organic basis during the first half of 2020. Sales fell to €1,985 million (US$2,328m), down from €2,486m (US$2,916m) during the same period last year.
Profit from recurring operations fell 29% during the six-month period to €551m (US$646m), down from €772m (US$905m) in 2019.
LVMH said the US faired better during the second quarter of this year as Hennessy Cognac saw a “strong rebound in June”, and in China.
The group’s second quarter was much more adversely affected by the pandemic than the first. Q2 sales fell 33% on an organic basis, a much steeper decline than the 14% drop in Q1.
Bernard Arnault, chairman and CEO of LVMH, said: “Our maisons have shown remarkable agility in implementing measures to adapt their costs and accelerate the growth of online sales.
“While we have observed strong signs of an upturn in activity since June, we remain very vigilant for the rest of the year. We continue to be driven by long-term vision, a deep sense of responsibility and a strong commitment to environmental protection, inclusion and solidarity.
“Thanks to the strength of our brands and the responsiveness of our organisation, we are confident that LVMH is in an excellent position to take advantage of the recovery, which we hope will be confirmed in the second half of the year, and to strengthen our lead in the global luxury market in 2020.”
LVMH also said the impact of the pandemic on revenue and its full-year results could not yet be ‘precisely assessed’ until more is known about the return to normal business in different markets.