(Adds details, management quotes)
By Astrid Wendlandt
PARIS, July 29 LVMH (LVMH.PA) on Tuesday posted
a 7 percent rise in first-half profit from recurring operations
that came in above expectations, and the world's largest luxury
goods maker confirmed its full-year earnings outlook.
The group, which owns perfume and cosmetics house Guerlain
and champagne house Moet & Chandon, made a current operating
profit of 1.541 billion euros ($2.4 billion) in the six months
to June 30, up from 1.440 billion in the year-ago period.
That beat the average expectation of 1.489 billion euros in
a Reuters poll of nine analysts.
LVMH, whose Louis Vuitton handbags can fetch 4,000 euros
apiece, kept its target of tangible growth in 2008 earnings.
"On the economic front, things should not get worse," LVMH
Chief Executive Bernard Arnault told an investor presentation.
"And what concerns the dollar, it should not go down more."
Arnault said he expected the Paris-based group to see a
repeat of its "excellent" first-half performance in the second
half and that the group would continue to gain market share.
He said LVMH would keep its options open about possible
share buybacks, which he said would depend on the evolution of
the share price.
LVMH's strongest growth in the period came from fashion and
leather goods. Their sales gained 14 percent on a like-for-like
basis and 6 percent on a reported basis.
The weak point was the group's wine and spirits division,
in which revenue fell 2 percent during the period, hit by an
increase in retail prices and currency fluctuations.
However, total half-year sales from the unit were up 6
percent when excluding the impact of currency fluctuations,
disposals and acquisitions.
Total interim sales hit 7.799 billion euros, up 5 percent
and above expectations of 7.713 billion in a Reuters poll.
Excluding disposals, acquisitions and currency impact, the
increase was 12 percent.
The total sales figures included a 10 percent rise in sales
in Europe in euro terms, followed by a 9 percent increase in
the United States in dollars term but also a 6 percent drop in
sales in Japan expressed in yen.
Net attributable profit rose 7 percent to 891 million
euros, above expectations of 866 million in the Reuters poll.
LVMH proposed an interim dividend of 0.35 euro a share,
unchanged from last year.
Its shares, down 17 percent since the start of the year on
concerns about consumer spending particularly in Western Europe
and the United States, closed barely changed at 68.03 euros.
(Editing by Paul Bolding and Braden Reddall)