Revenue from the spirits and cognac segment of LVMH fell by 11% in the first half of 2023 as Hennessy Cognac sales suffered from weak U.S. demand, according to the company’s half-year revenue earnings report released yesterday.
Overall, LVMH’s wine and spirits saw revenue fall by 3% in the first half of 2023 to $3.5 billion. But the spirits segment dropped to roughly $1.8 billion, down from around $2 billion. Hennessy was impacted by the “economic environment” in the U.S. and by the continued high stock level of its retailers.
LVMH’s wine and spirits arm, Moët Hennessy, was the only segment of the world’s largest luxury company to not record double-digit organic revenue growth.
The company cited a contraction in cognac compared to the first half of 2022, which benefited from the significant impact of inventory rebuilding among distributors. Demand for cognac is also gradually recovering in China, as the impact of the pandemic still lingered at the start of the year. The group said Glenmorangie whisky and Belvedere vodka continued to show strong momentum in innovation.
A double-digit decline in North America also drove first quarter sales down for Remy Cointreau’s cognac division (-44%), although the first quarter followed a 10% sales rise last year.
LVMH announced this week that it is officially a premium partner of the Paris 2024 Olympics, meaning its roster of brands, which also includes champagnes Veuve Cliquot and Dom Pérignon will be served at Paris 2024 events. So far this year, Hennessy celebrated the 50th anniversary of the art form by partnering with rapper Nas on a limited-edition bottle. The group also just announced a shift to organic for Belvedere vodka.
The luxury giant overall saw total sales increase by 17% organically during the first half of the year compared to the first half of 2022.