The half-year earnings season has delivered its verdict: after two years of decline, French luxury is returning to growth, but a fragile growth that is very uneven from one group to another. At the end of July, LVMH, Kering and Hermès all published financial results that paint the same picture: a genuine recovery, but one that still relies on just a few growth drivers.
- LVMH: €38.6 billion in revenue in the first half, +2% organically, with an acceleration to +3% in the second quarter
- Kering: €7.22 billion, +1% like-for-like, first quarter of growth in three years
- Hermès: €8.2 billion, +6% at constant exchange rates, and an operating margin of 41%
- The takeaway: LVMH’s fashion and leather goods return to positive territory, Gucci limits its decline, but China remains sluggish
LVMH: fashion and leather goods finally return to growth
Published on 27 July, the financial results of the world number one show €38.6 billion in sales over the half-year, up 2% organically, with an acceleration to 3% in the second quarter (4% excluding the impact of the Middle East conflict). Recurring operating profit stood at €8.7 billion, maintaining a margin of 22.5%, while net profit group share reached €5.7 billion, stable year-on-year.
The key highlight lies in the flagship division: fashion and leather goods returned to growth after several quarters of contraction, driven in particular by Christian Dior, where the first pieces designed by Jonathan Anderson have arrived in stores. An interim dividend of €5.50 per share will be paid on 3 December.
Kering: first positive quarter in three years
On 28 July, Kering reported half-year revenue of €7.22 billion, down 3% as reported but up 1% on a like-for-like basis. The second quarter came in at €3.65 billion, up 2% like-for-like: the group’s first quarter of growth in three years. The recurring operating margin stood at 12.8%, or €921 million.
Gucci, on which most of the group’s trajectory depends, limited its like-for-like decline to 2% in the second quarter, compared with double-digit drops last year, boosted by a 9% rise in demand in North America. The brand generated €1.41 billion over the quarter, just as the first collections of the Demna era arrived in stores. Winning back the Chinese market, meanwhile, remains to be achieved.
Hermès: the usual show of strength
On 29 July, Hermès once again played in a league of its own: €8.2 billion in half-year revenue, up 6% at constant exchange rates (2% at current rates), with a recurring operating margin of 41% of sales, despite a negative currency impact of over €360 million. Recurring operating profit reached €3.35 billion, with net profit remaining around €2.2 billion.
Leather goods, which account for around half of revenues, grew by 10% in the second quarter. The Parisian saddler thus confirms what it has been demonstrating since the start of the slowdown: a model of curated scarcity that absorbs cycles far better than houses reliant on creative renewal.
Our view
Three publications, three speeds, but one single lesson. The luxury recovery is real, but it is not widespread: it relies on leather goods, the return of American buyers and a few creative reboots, while Chinese demand is slow to awaken. For LVMH as for Kering, the challenge over the coming months will lie less in the figures than in the reception given to the new creative directions, Anderson at Dior, Demna at Gucci, whose collections will only produce their full effect from the end of the year. Hermès, for its part, continues to prove that in luxury, supply discipline is worth far more than the race for volume.
