LVMH First-Half Profit Falls 5 Percent, Misses Expectations

PARIS, France — LVMH, the world's largest luxury-goods company, reported first-half earnings that trailed estimates as the strong euro and weaker demand for premium cognac weighed on growth.

Profit from recurring operations fell 5 percent to 2.58 billion euros ($3.5 billion), Paris-based LVMH said today in a statement after European markets closed. Analysts expected 2.76 billion euros, according to the median of 18 estimates compiled by Bloomberg.

LVMH is introducing more expensive Louis Vuitton handbags while increasing investment in its other fashion and accessories brands amid softening demand for expensive liquor and watches. Remy Cointreau SA last week reported a 15 percent drop in quarterly sales at its Remy Martin cognac unit, hurt by China’s clampdown on lavish banqueting and gift-giving by officials.

LVMH is confident of pursing further market-share gains in its traditional markets as well as in high-potential emerging territories, Chairman and Chief Executive Officer Bernard Arnault said in the statement.

Sales advanced 3 percent to 14 billion euros. Analysts predicted 14.2 billion euros. Excluding currency swings and acquisitions, sales climbed 5 percent.

By Andrew Roberts; editors: Celeste Perri, Paul Jarvis, Robert Valpuesta