Lvmh Moet Hennessy Vuitton SE - ADR - Level I

H1 2026 headline performance (good surprise: strong margins despite FX): - Revenue EUR 38.6bn, +2% organic (vs -3% reported due to -5% currency and -1% perimeter from DFS disposal). - Q2 organic acceleration to +3% (vs +1% in Q1 per management comments). - Operating margin 22.5% (very strong); Profit from recurring ops EUR 8.7bn, mainly impacted by significant negative currency. - Net income ~in line with last year; free cash flow > EUR 4bn (notably strong for a second semester).

Group profitability: FX was the key headwind; operational discipline delivered cushion (good): - Cecile highlighted EBIT growth ~+4% organic, but offset by ~EUR 700m negative currency impact. - Gross margin improved +30 bps to 67.1% (supports the “discipline/efficiency” narrative). - Net profit group share EUR 5.7bn, in line YoY; tax rate ~30% (French surtax impact persists).

Business group momentum (mixed, with clear winners): - Fashion & Leather Goods: EUR 18.1bn, -1% organic (reported -5% after FX). Q2 organic +1%; margins remain extremely high but operating margin contracted 60bps largely due to FX. Sequential acceleration in most brands in Q2; Louis Vuitton and Dior both positive in Q2. - Watches & Jewelry (best momentum): EUR 5.2bn, +9% organic; Q2 double-digit growth. Operating margin 15.9% (+90bps YoY). Tiffany and Bulgari both strong; watches still somewhat negative but category improving when combined. - Selective Retailing: EUR 8.4bn, +5% organic, reported -2% (FX -5% + DFS perimeter impact -3%). Sephora “good performance” broadly across categories/regions. - Wines & Spirits (resilient recovery): EUR 2.6bn, +5% organic; operating margin 22.4% (+210bps). Growth mainly volume/Champagne; Cognac improving demand especially in China; U.S. softer. - Perfumes & Cosmetics: EUR 3.9bn, flat organic; reported down after FX. Operating margin improved slightly (+20bps) despite flat growth—management attributes “sluggish” top line to selective distribution/promotion discipline and travel retail headwinds.