Louis Vuitton posts 53% net profit gain

French luxury goods behemoth LVMH Moet Hennessy Louis Vuitton Tuesday reported a 53% jump in first half net profit, heralding a strong return of high-end consumption and, in a departure from cautiousness seen in previous quarters, expressed confidence in the rest of the year.

The world's largest luxury goods company, which owns Krug champagne and shoe-maker Berluti, posted net profit for the first six months of 1.05 billion (US$1.36 billion), up from 687 million a year ago as all divisions posted double-digit revenue growth.

In a sign the company plans to solidify its position as the industry's largest player, LVMH executives pledged to employ marketing efforts and invest in fast-growing markets like China to make market share gains.

"In the current recovery from the economic crisis, LVMH will continue to gain market share," the company said in its statement.

Revenue for the six months to June 30 was 9.1 billion, up 17% from 7.8 billion a year earlier and ahead of analyst expectations of 8.85 billion. All divisions, from perfume to wine posted double digit sales growth with the highest increase coming from watches and jewelry, up 28% to 443 million. LVMH said there was a strong recovery in orders. The business was one of the hardest hit in the sector as retailers dramatically cut back on orders during the crisis, preferring to draw down stocks before buying new products.

The fashion and leather goods division, which houses the company's star brand and one of the industry's strongest performers throughout the crisis, the leather goods maker Louis Vuitton, posted 18% growth to 3.52 billion. Luxury consumers took refuge in more classic leather accessories during the economic downturn, preferring staid brands to the trendy handbags of the boom years.

"We were the highest in the consensus, but they managed to beat us anyway," said Luca Solca, analyst with Bernstein.

Still, the company declined to give full-year guidance.

"Thanks to the crisis we don't give previsions anymore," LVMH Chairman and Chief Executive Bernard Arnault said Tuesday. Arnault and other luxury executives have been cautious in calling a recovery.

Arnault declined to give details of the company's future acquisition plans, except to say he is not interested in buying the French cosmetics giant L'Oreal SA. A political scandal in France, originally stemming from a legal dispute between L'Oreal heiress Liliane Bettencourt and her daughter Fran oise Bettencourt-Meyers, has raised questions about the company's shareholder structure.

Profit from recurring operations was 1.82 billion, up 34%, beating analyst expectations for 1.68 billion.

LVMH shares have climbed nearly 20% over the past six months, outpacing a 2% decline in the Paris CAC-40 index over the same period. Expectations for a firm pickup in the luxury goods industry were fueled by a strong showing from smaller peers Burberry and Hermes International earlier this month.