Four major luxury brands have delivered four very different results over the past two days: Hermes and Moncler emerged as winners, LVMH reported mediocre results, and Kering clearly suffered.
Luxury fashion group Kering announced a dramatic 50 percent drop in net profit to €878 million (£740 million) for the first six months of 2024 – even worse than the forecast profit drop of 40 to 45 percent.
Kering, which owns Gucci, Bottega, Balenciaga and Saint Laurent, has suffered particularly in recent months as Balenciaga became embroiled in a PR scandal after one of its advertising campaigns caused scandal for the company. Balenciaga was once the group’s fastest-growing brand.
At Gucci, sales also fell by 20 percent in the first half of the year.
Jean-Marc Duplaix, Kering’s deputy chief executive, described the macroeconomic environment as “volatile” and said he “could not predict trends for the rest of the quarter.”
For other brands, however, the difficult environment is easing: Moncler and Hermes both reported very robust results.
The Moncler Group reported sales of 1,230.2 million euros (1,037 million pounds) in the first half of 2024, an increase of 11 percent at constant exchange rates and eight percent at current exchange rates. In the second quarter, group sales reached 412.2 million euros, an increase of three percent.
Moncler pointed to the “positive development of mainland China, despite the difficult basis of comparison and the increase in Chinese consumption abroad”.
Remo Ruffini, Chairman and CEO of Moncler, said he was “pleased” with the positive results “in the midst of a generally complex business environment for the luxury goods industry.”
Hermes also reported impressive results. All geographic regions recorded double-digit growth, the company said. Sales rose by 12 percent at current exchange rates.
Meanwhile, LVMH fell slightly short of analysts’ expectations of three percent growth. Sales rose by one percent. Net profit also fell by 14 percent to 3.3 billion euros (2.8 billion pounds).
Despite the decline, Bernard Arnault, Chairman and CEO of LVMH, remained optimistic.
“The first half results reflect LVMH’s remarkable resilience, underpinned by the strength of its Maisons and the responsiveness of its teams in a climate of economic and geopolitical uncertainty,” he said.
