What: LVMH boasts impressive financials from H1 and lavishly invests billions in prime store locations.

Why it is important: LVMH manages major cash outflows and investment decisions to strengthen its position as the global leader in luxury goods.

The net profit of LVMH in the first half of the year jumped 30% to EUR 8.48 billion as the strong demand for luxury products In Europe and Asia fuelled growth in most segments. Recurring operations profit totalled EUR 11.57 billion which represented a 13% year-over-year.

Financial results of the company were in line with analysts’ forecasts such as Q2 group sales amounting to EUR 21.20 billion and the 21% increase in Fashion and Leather Goods’ organic sales. However, sales of wines and spirits fell during Q2 due to the worsening US economic environment, and luxury stocks fell after Richemont’s surprise report of declined revenue in the Americas.

The company reported an operative investments figure of EUR 3.6 billion from the first half of the year- EUR 1.6 billion of which was allocated to commercial real estate, including the major purchase on the Avenue des Champs-Elysées in Paris. The CFO labelled their purchases as opportunistic and an investment in obtaining key locations in Paris, London, NYC’s Fifth Avenue, and Rodeo Drive in Los Angeles.

There are plans to continue to invest in Tiffany & Co’s Fifth Avenue flagship store, the Landmark, which is understood to have cost hundreds of millions of dollars to refurbish. LVMH aims to redo most of the network of stores at Tiffany to boost the global image of the brand.

LVMH is confident and optimistic about the second half of the year despite dwindling U.S. sales due to the increasing sales in Asia and the excellent results of H1.

LVMH’s net profit rose 30 % over the first half of the year