LVMH (MCFP; Aa3/AA-) 1H (to June) Results

Slight misses across the board but nothing flashing red (similar to Richemont). Kering is a tad more exposed to China (at 35%) but still if it shows weakness in NA/Europe tomorrow it will be hard to blame macro now.

• Revenues at €41.7b (+2% organic, -1% reported). By segment Wines & Spirits were weakest (-9%), followed by Watches & Jewellery (-3%) - though Watches still better than what Swatches and Richemont reported last week. Selective retailing (+8%) and Perfumes & Cosmetics (+6%) grew while the largest fashion and leather goods segment was mute (+1%).
• Its buried reporting geographical performance clearly for some reason...the qualitative commentary is growth in Europe and US and exceptional growth in Japan from inbound Chinese tourists. There is nothing surprising there (in-line with Richemont) and again points to Burberry facing brand issues in the weakness it saw outside China.
• Gross margin was 69% little changed while operating income was €10.7b (-8%) at a 25.6% margin (-180bps) - SG&A increase combined with headline revenue fall contributed to that. Operating cash flows were up 74%yoy to €3.1b on favourable WC.
• Gross/net financial debt was €23/€12.5b - within recent years ranges. Add on another €17b in leases. Interim dividend is €5.5/share (€2.75b) - in line with recent history.
• Outlook is non-existent outside some high-level comments (similar to last year), earnings call ongoing.