Sales of Louis Vuitton handbags and the easing of Covid-19 lockdowns around the world helped revenue increase at fashion house LVMH. In a stellar quarter for the owner of some of the world’s best-known luxury brands, like-for-like sales at the group rose by 84 per cent in the three months through to June, ahead of analysts’ expectations. Much of the gain was fuelled by demand for fashion and leather goods, particularly at Louis Vuitton, Christian Dior, Fendi, Loewe and Celine, the company said. Organic revenue in this division jumped 120 per cent in the second quarter from a year earlier and by 40 per cent from the same period in 2019. LVMH benefitted from an easy comparison with 2020 as many shops remained shut last year due to the pandemic. Demand “remains very strong,” chief financial officer Jean-Jacques Guiony told analysts on a call. This is the “strongest first-half update ever” for LVMH and will probably prompt earnings upgrades for a company seen as the bellwether of the luxury-goods industry, Luca Solca, an analyst at Sanford C. Bernstein, said in a note to clients. LVMH was active in the period, presenting a "cruise collection" from Christian Dior at an Athens event attended by celebrities such as Catherine Deneuve and <i>The Queen’s Gambit</i> star Anya Taylor-Joy. It also reopened La Samaritaine, a department shop located on the right bank of Paris that had been shut for more than 15 years. Profit from recurring operations came in at €7.63 billion ($9.02bn) in the first half. Analysts had expected €6.62bn. Mr Guiony said the operating cost base during the period was flat, compared with 2019, even though sales are “significantly up.” Capital expenditure was also “tightly monitored”, he said. The “real surprise” came from the outperformance in profitability, Morgan Stanley analysts led by Edouard Aubin wrote in a note after the results. Looking ahead, Dior is preparing to reopen its shop at 30 Avenue Montaigne in Paris in the second half, LVMH’s director of financial communications, Chris Hollis, said on the analyst call. Tiffany is set to launch a new collection of gold jewellery after an “excellent” first half, with “momentum particularly strong” in Asia and the US, said Mr Hollis. LVMH is also recording progress with local clients in Europe, although it is not sufficient to offset the lack of tourists in the region, Mr Guiony said. Last month, billionaire LVMH founder Bernard Arnault predicted foreign visitors may not return to Paris within the next year or two. Mr Guiony said the goal for travel retail business DFS in the second half of this year will be to break even but warned it would be difficult. Activity at luxury hotel brand Belmond is better than last year, notably in the Mediterranean, but overall “it won’t be a fantastic season” because business picked up late compared with normal times. Demand from Chinese consumers “remains as good it has been for quite some time”, Mr Guiony said. Asia, excluding Japan, represented 38 per cent of LVMH’s total revenue in the first half, followed by a quarter for the US. Speaking about its mergers and acquisitions strategy, Mr Guiony said absorbing its latest portfolio brand Tiffany will take some time and that the group typically does not proceed with such big takeovers “every other year”. Last week, LVMH announced a 60 per cent stake purchase in Off-White, the streetwear brand created by Virgil Abloh, who is also in charge of menswear design at Louis Vuitton. The luxury conglomerate also said earlier this month it would take a minority investment in the new brand of Phoebe Philo, the former cult designer at Celine. The group did not disclose the terms of those deals. LVMH’s net financial debt increased to €15.27bn at the end of June from €4.24bn at the end of last year after closing the deal to buy Tiffany in January. Shares in LVMH have rallied by 68 per cent in the past year in Paris.