INTERNATIONAL. LVMH Moët Hennessy Louis Vuitton recorded revenue of €10.6 billion for the first quarter of 2020, down -15% compared to the same period in 2019 and down 17% on an organic basis.
In the Selective Retailing division, organic revenue was down -26% in Q1. LVMH said: “DFS experienced a significant decline in activity in most destinations as a result of the suspension of international travel.”
In addition, all Sephora stores were closed in China for most of the quarter, while those located in Europe and the US have been closed since mid-March. Online revenue significantly increased over this period though, said the group.
In Wines & Spirits, a positive currency effect and a price increase policy partially offset the decline in volumes. Revenue was down -14% on an organic basis in Q1. The US market demonstrated resilience over the period, supported by advance orders from distributors. Hennessy Cognac slowed down in China given lower demand linked to the epidemic and to the timing of 2020 Chinese New Year.
The Fashion & Leather Goods business group recorded a decline in organic revenue of -10% in the quarter, with store closures around the world. Online sales saw rapid growth, noted the group.
In Perfumes & Cosmetics, organic revenue decreased -19% in the first quarter of 2020. LVMH said: “The major brands demonstrated their resilience as retailers reduced their inventory levels given the current crisis. Online sales grew rapidly.”
The Watches & Jewelry business group recorded a -26% drop in organic revenue in the quarter. Bvlgari experienced a decline in its activity due to the closure of its stores, in Asia in particular. TAG Heuer and Hublot were affected by the reduction of orders by retailers.
LVMH Chairman and Chief Executive Officer Bernard Arnault said: “In this unprecedented context, I would first like to thank our teams around the world, who have mobilised to help caregivers and participate in the collective effort by making hydroalcoholic gel for hand sanitisers, by facilitating the movement or by producing medical masks or even by sourcing critical equipment for hospitals. The health and safety of our employees and customers must remain our top priority. On a global scale, the group works closely with the teams of each of our Maisons to provide them with all the resources they need.”
The company acknowledged the closures of manufacturing sites and stores in most countries in the first half will have an impact on annual revenue and results.
“This impact cannot be precisely evaluated at this stage without knowing the timetable for a return to normal business in the different areas where the group operates. We can only hope that the recovery happens gradually from May or June after a second quarter which will still be very affected by the crisis, in particular in Europe and the US.”
The LVMH Board decided this week to propose a -30% reduction in the 2019 dividend, to €4.80. Bernard Arnault, along with other Executive Board members will give up their remuneration for the months of April and May as well as all other variable remuneration relating to 2020.
