Rodolphe Ozun : Good afternoon, everyone, and welcome to today's conference call. I'm Rodolphe Ozun, Director of Financial Communications. And with me is Cecile Cabanis, our Chief Financial Officer. Cecile will start with key highlights of the first half of 2026. I will then share details on performance by business groups, after which Cecile will comment on the financials and conclude. And then we'll be happy to take your questions. Turning now to our announcement, our release position a short while ago in French and English and is available on all website, lvmh.com, as are the slides for today's call. The habitual safe harbor statement is included in our press release and on Slide 2 of our presentation. Let's now move on to today's topic, our first half figures. And passing over to Cecile.
Cecile Cabanis : Thank you, Rodolphe. Hello, everyone. Thank you for attending the call, and I will dive right into the results, starting on Slide 3. LVMH delivered a very solid set of results in the first half and a sequential acceleration on organic growth in the second quarter. Group revenue rose 2% organic in H1 at EUR 38.6 billion, with Q2 up 3% organic. Operating margin reached a very high level of 22.5%, very good outcome as we remain focused and disciplined. Profit from recurring operations closed at EUR 8.7 billion, reflecting a significant negative currency impact. Net income was in line with last year. Finally, another semester of strong free cash flow delivery, reaching more than EUR 4 billion. Let's turn to Slide 4 with a few qualitative comments on the semester. Overall, the first half of 2026 confirms the strength and resilience of our model. Middle East conflict impacts H1 top line growth by a negative 1 point, both Q1 and Q2 suffered from this point. So if we exclude that, organic growth is rather 4% in Q2. Revenue momentum accelerated sequentially in our 3 largest divisions, Fashion & Leather Goods, Selective Distribution, with Watches & Jewelry at double-digit growth in Q2. Our key geographies posted sequential acceleration. U.S., Japan and Asia all posted mid-single-digit growth for the first half. These results were supported by, amongst others, product innovation and creativity, which delivered tangible results in the first half, the strength of our icons and outstanding experiences in retail. The first half also demonstrate our continued attention to operational efficiency. Rodolphe will now comment on the numbers and key highlights by business group, and I will then comment further on the group financials.
Rodolphe Ozun : Thank you, Cecile, and we'll start with Wines & Spirits on Slide 7. The Wines & Spirits group recorded EUR 2.6 billion in revenue in the first half, up 5% on an organic basis and flat on a reported basis after a negative 4% currency impact. Broken down, Champagne & Wines generated EUR 1.4 billion, up 7% organic and up 2% reported after a negative 5% currency impact. And Cognac & Spirits delivered EUR 1.2 billion, up 3% organic and down 1% reported after taking into account a negative 4% currency impact. Profit from recurring operations for the division rose 11% year-on-year to EUR 582 million, and operating margin rose 210 bps to 22.4%. Moving to Slide 8. Wines & Spirits improved markedly in the first half of the year. The 5% organic growth achieved in H1 was predominantly driven by volume growth, reflecting improving demand for our products. In champagne, volume, price and mix all contributed to growth, and all Maisons accelerated in the first half of the year with strong momentum in Europe and Japan, which improvement was driven by the outperformance of prestige cuvees. For rose wines, volume growth came from Chateau d'Esclans in the U.S. and Minuty in Europe. And for [ Sando ], growth came from the U.S. and Asia. In cognac, Hennessy volumes also returned to growth in H1. U.S. demand remains soft and depletions are still negative, but this was more than offset by improving demand elsewhere, notably the [ SOP ] in China. The launch of a new ready-to-serve format in the U.S. and [ see ] very special cocktails had limited impact on volumes at this early stage, but highlights our commitment to innovation. Finally, spirits also performed well, driven by [ Belvedere ] and Glenmorangie. Going forward, we expect the division to grow at constant currencies in 2026, albeit not as much as in H1, and we expect full year EBIT margin to be closer to 2025 levels due to cost phasing and to the delayed adverse impact of currencies in this division due to profit in stocks notably. Turning now to Fashion & Leather Goods. On Slide 10, revenue reached EUR 18.1 billion for the first half, down 1% organic and down 5% reported after taking into account a negative 4% currency impact. Q2 growth amounted to plus 1% organic. Profit from recurring operations came to EUR 6.2 billion, down 7% year-on-year, and operating margin contracted 60 bps to 34.1%, although in both cases, the decline is more than entirely attributable to currencies. Turning to Slide 11, two broad comments on the division. Firstly, virtually all brands accelerated sequentially in Q2. including Louis Vuitton and Christian Dior. Secondly, local demand outperformed in both Q1 and Q2, but offshore demand, which was negative in Q1, turned flattish in the second quarter. A few words on the largest brands. Louis Vuitton celebrated the 130th anniversary of the Monogram canvas with success, consistent with its ambition to communicate on some of its most distinctive attributes, know-how, history and travel. And Christian Dior accelerated sequentially, driven by continued excitement around the unveiling of Jonathan Anderson's new creative vision with good response to bags and to ready-to-wear. Loro Piana and Rimowa continued to enjoy above-average growth while Celine and Fendi improved sequentially compared to the second half of '25 and to Q1 '26. Moving on to Perfumes & Cosmetics. On Slide 13, revenue reached EUR 3.9 billion, flat on an organic basis and down 4% on a reported basis after a negative 4% currency impact. Profit from recurring operations declined 2% year-on-year to EUR 417 million, whilst operating margin improved 20 bps to 10.6%. Now to Slide 14, which details product innovation across our Maisons. The Perfumes & Cosmetics business group continued to see good performance from these historic Maisons, in particular, Parfums Christian Dior and [indiscernible]. By category, fragrances outperformed, although again, and Dior and Guerlain enjoyed good momentum in both makeup and skincare. And looking at key markets, while travel retail remained a headwind, Asia and Japan enjoyed good momentum. Finally, our Maisons remain focused on maintaining their selective distribution strategy with tangible and measurable benefits on brand desirability. Next, turning to Watches & Jewelry on Slide 16, where revenue for the first half of '26 rose to EUR 5.2 billion, up 9% organic and a 3% reported after taking into account a negative 6% currency impact. Profit from recurring operations rose to EUR 831 million in the first half of '26, up 9% year-on-year, and the operating margin rose to 15.9%, up 90 bps year-on-year. I'm now on Slide 17. Jewelry recorded an excellent performance in the first half of the year, including double-digit growth in the second quarter and positive growth across all key regions, driven by the U.S., Asia and Japan. Tiffany continues to progress in its elevation strategy with iconic lines, new store and high jewelry all outperforming materially. Focus remains on developing our iconic lines and HardWear and not in particular, enjoy exceptional growth despite very tough comps. And meanwhile, Tiffany is also progressing with the ongoing renovation of its retail network, with approximately 40% of the network now renovated. Bvlgari also continued to enjoy strong momentum, notably in retail, with strong growth across jewelry, high jewelry and watches. And again, growth was broad-based across all key regions and driven by the continued success of Bvlgari's icons, Serpenti, [indiscernible] and B.zero1. Our watch Maisons also invented several exciting innovations in the first 6 months of the year. Now moving on to our last business group, Selective Retailing, on Slide 19. You can see revenue came to EUR 8.4 billion in H1, up 5% organic and down 2% reported after taking into account a negative 5% currency impact and a negative 3% perimeter impact due to the disposals of DFS. Profit from recurring operations came to EUR 893 million, up 2% year-on-year, resulting in a slightly improved operating margin of 10.6%. And turning to Slide 20. A few words on Sephora, which enjoyed good performance across key markets, including the U.S., Europe, Middle East and China. And all categories recorded positive growth, with makeup and hair care outperforming. Sephora also continued to invest in its retail network and to expand into new markets, with Belgium and Croatia opened in the first half of the year, amongst others. Le Bon Marche continued to see good growth in the first half. And finally, we have continued to progress with the sale of DFS assets, which led to a negative 1 percentage point perimeter impact at group level in Q2. This concludes the business group presentation, and I'll now pass back to Cecile for financial results.
Cecile Cabanis : Thank you, Rodolphe. You can breathe now, I guess. And now let's discuss H1 2026 financials in more detail, starting with Slide 22 with the revenue bridge. First half revenue reached EUR 38.6 billion, up 2% on an organic basis, down 3% on a reported basis, given, first, a strong negative 5% currency impact, mainly U.S. dollar, Japanese yen and Korean won and a negative 1% perimeter impact due to the disposal of DFS activities in Greater China. Organic growth accelerated 2 points in Q2 to 3%. Slide 23 details the geographic breakdown of revenues in euros. Our regional mix remained well balanced, with Europe, 25%, U.S., 25%, Japan, 8%. Asia gained 1 point to 29% and other markets, which includes the Middle East, fell 1 point to 13%. Slide 24 highlights regional trends with growth across all key markets in Q2. In the first half, growth came from Asia, the best performing region, up 6%, followed by Japan, up 5%, and then the U.S., up 4%. Europe declined modestly 1%, penalized by lackluster touristic demand. Tourism improved, however, in the second quarter, driven by Asian clientele, which explained the sequential slowdown in Asia and the improvement in both Europe and Japan. The sharp acceleration in the U.S. offshore demand in Q2 came on top of a tangible improvement in local demand, leading to the sequential acceleration in the U.S. market, up 6% in Q2. Turning to Slide 25, which illustrates the tangible acceleration of organic growth in our largest divisions. Fashion & Leather Goods returned to growth in Q2, driven by the acceleration of U.S. and Japan. Watches & Jewelry enjoyed the strongest growth in H1 with 9% organic, including double-digit growth in Q2 driven by very strong performance at both Tiffany and Bvlgari. Selective Distribution also grew 5% in H1, supported by a continued strong momentum at Sephora, as Rodolphe presented, while the sale of DFS assets negatively impacts the division's reported growth. On Wines & Spirits, revenues grew 5% organic in H1, a very good outcome supported by improving consumer trends. And finally, Perfume & Cosmetics, where revenue momentum is stable with a good performance by our historic Maisons. Let's now switch to operating income on Slide 26 with the bridge of operating income versus last year. As you can see, we enjoyed nice EBIT growth of around 4% in organic terms and a negligible perimeter impact, but this was more than offset by a significant negative currency impact totaling nearly EUR 700 million. Slide 27 details operating income by division. Wines & Spirits delivered a very strong performance, with double-digit EBIT growth driven predominantly by Champagne & Wines, but also a nice improvement in Cognac & Spirits. Watches & Jewelry also delivered a significant increase in operating profit, driven by strong growth in jewelry and OpEx discipline with continued investments in Tiffany's transformation. Fashion & Leather Goods' operating income decline is entirely driven by currencies at constant currencies. EBIT margin improved modestly, and operating income was flat. Operating margin remains very high at 34%. Finally, Perfume & Cosmetics and Selective Distribution operating profit evolution is close to flattish, with Selective Distribution improving slightly. Now on Slide 28, a few comments on our income statement. All in all, the net profit group share closed at EUR 5.7 billion, in line with last year. If we go line by line, so revenues, I already commented. Gross margin evolution is in line with revenue evolution, which is a good outcome, with the rate of gross margin actually improving by 30 bps versus last year at 67.1%. The negative currency impact is fully offset by organic margin expansion across divisions on the back of improved [ time line ]. And in addition, there is a modest positive perimeter impact from DFS assets sale. Operating expenses were actively managed with a 2% decline in marketing and selling expenses. G&A was kept flat, reflecting continued discipline on cost. Other income and expenses are slightly positive on the semester, nothing major to report there. And this leads to an operating profit for the group of EUR 8.7 billion already commented earlier. Financial results for the first semester improved strongly versus last year, and I will provide more details in the next slide. And finally, tax rate remained at a very high level of 30%, reflecting this year, again, the impact of the French surtax. Moving on Slide 29. Positive change, as I was saying, in net financial result of EUR 300 million, which includes on one side, cost of debt and interest and lease liabilities, which both saw a small improvement. The cost of FX derivatives decreased by over EUR 100 million. It's not so much the cost of the hedge, but rather, it's the impact from the amplitude of currency move that was more contained this year versus H1 last year, where the amplitude was huge. Lastly, and again, we have a strong positive impact from the revaluation method in mark-to-market of our financial investment portfolio that led to an increase in value larger than the one of last year. However, a reminder that this impact is purely theoretical and does not reflect any profit in reality. Turning to Slide 30 regarding the structure of the balance sheet. Currencies once again had an impact on both -- on most balance sheet lines in euro terms. Both assets and liabilities, and consequently, the structure of the balance sheet remains very similar to last year. One point I didn't comment is equity slightly up, reflecting the share buybacks we completed at the end of June. Slide 31 illustrates another strong momentum on free cash flow generation in H1, closing at EUR 4.1 billion with a modest decline in cash from operating activities, entirely offset by operating investment evolution. Slide 32, net debt-to-equity ratio. As you can see and compare to H1 2025, our net debt declined by almost EUR 2 billion and gained edge down 3 points to 12%. I will end my comments on the figures with the interim dividend, which has been fixed at EUR 5.50 per share and will be paid in December 2026. Maybe before moving to Q&A, a few words to conclude this presentation on Slide 34. So what you've seen is that despite continued instability in the macro environment, trends improved across all geographies in H1, and where wealth is created, consumer appetite for luxury and for our products, in particular, is strong. Secondly, the outperformance of our most iconic products illustrate the desirability of our brands and shows our strategic initiative bearing fruits across diverse businesses. So based on these successes, we will continue to adjust evolving consumer expectation with distinctive stores and experience, attention to perceived value and increase brand desirability and innovation. Finally, while we continue to invest selectively, it's important to note our financial discipline, which continue to deliver tangible results, as evidenced in H1. Thank you very much for your attention, and we are now ready to take your questions.
Charles-Louis Scotti : I have two, the first one on Fashion & Leather Goods. Is there any sense you can give us a bit more granularity of the performance by brand and especially on Dior? I'm curious to know if the brand returned to positive growth in Q2. And it also seems that the growth at Dior was constrained by difficulties in ramping up production capacity related to the internalization of production and maybe the change in designer. Could you confirm whether this is indeed the case? And if so, if you can estimate the growth of Dior, what kind of growth Dior could have achieved without these production constraints? And then my second question is on the performance by geography, particularly Asia, excluding Japan. This was the only region where growth deteriorated sequentially in Q2. And I would have expected the demand in Korea to accelerate and the region also to benefit from to some extent, the repatriation of Asian spending because they travel less in Europe. What is the main driver behind the slowdown? Is it China? And if you can elaborate a little bit on the change versus Q1 and what factors weighed on [ human ] locally?
Cecile Cabanis : So it's two very exhaustive questions. Thank you, Charlie. To start with on Fashion & Leather Goods and your question on giving more granularity on the brand, what we can tell you is that Vuitton and Dior are both in positive territories in Q2. Vuitton is consistent with the average, Dior is a bit above. You have Loro Piana and RIMOWA still outperforming. When it comes to Dior, all clienteles were up in H1 with double-digit growth from the Americans and Japanese in Q2 all accelerated. You have laser goods and remain ready to we're outperforming based on the big success of Jonathan Anderson first release collections. And so it's only after 2 quarters and probably more to come. As there have been some issues in supply chain, I think whenever you start with accretive renewal and you are in a transition, it's a bit more complex for your supply chain. I will not give any theoretical figure. What we see, I think, is telling us that we have made great results, and that the trend is positive and accelerating. So I think it's what matters. When we look at Asia, you're right to mention that Asia is decelerating in Q2. But if you look at clientele, Asian clientele spending is unchanged quarter-on-quarter. Same for Chinese. However, Asian clientele did spend less in Q2 in Asia and more in Europe and in Japan. That's also why in the graph I was showing you, you see an acceleration at the same time in both Europe and Japan. It's also interesting to see that in Japan, tourism is more diversified than at some stage with American, Korean and Chinese are gradually recovering. So that's for Asia and for Chinese.
Anne-Laure Jamain : I have two questions. My first one is on jewelry and watches, which did record a very strong acceleration in Q2. So was the performance between categories within that segment? Was the sequential improvement mostly driven by jewelry or watches also sequentially improved? And have you seen any particular strong performance for that division in South Korea and what is the exposure? And my second question is about Wines & Spirits. So given the signs of recovery in H1 that we have seen through that division in H1 or directionally, should we think about this division for the remainder of the year?
Cecile Cabanis : Thank you, Anna. On Watches & Jewelry, the growth momentum was mainly driven by both Tiffany and Bvlgari on jewelry. We've seen a very good performance. I mean, both in Q2, Bvlgari and Tiffany grew mid-teens with very strong performance on icons. The acceleration when it comes to geography was both Americas, Japan, but also Korea, as you mentioned. And on Tiffany, it's clearly around all the part that we transform because we have now 60% of the business which is transformed growing much quicker than the legacy that is still negative. We have some icon like hardware growing 75%, and that is nearly 50%. So there are a lot of successes and a lot of momentum within the icons. Same for the renovated stores. So it's really fortify the transformation agenda that is bearing fruit and success with the strength of the icons becoming even stronger quarter after quarter. On Bvlgari, we've seen success on really all the icons. Geographical span is very even when it comes to success as well. There has been new lines launched like Vimini, which is off a good start. High jewelry has a bit overperformed as well. So it's really across the board that we've seen that. Watches are a bit negative still in Q2. But if you take watches as a category, adding Bvlgari, Tiffany and Vuitton, it's slightly growing for the period. So that's where we are. On Wines & Spirits, we are very pleased with the results, which is really a big work from the teams reaching 5%, which is really an improvement in momentum for the Champagne & Wines in particular, prestige cuvees also and improvement of demand for cognac in China that is offsetting the still soft demand in the U.S. Rodolphe mentioned, when he was commented on his slide that we still do expect growth for the remaining of the year, but probably a bit more moderate. So that's what we can give us a direction for Wines & Spirits.
Thomas Chauvet : I have two. The first one, could you come back to the second quarter, fashion, leather performance by nationality? I think you said the Chinese were more or less in line with Q1? Could you comment on the other nationalities on a global basis, please? And second one on the FX impact on margin. If I'm not mistaken, in February, you guided for -- and that was very useful, thank you -- for an FX headwind on EBIT for this year, broadly similar to last year, close to EUR 1 billion. And that was going to be very H1 weighted. So you were right with over EUR 600 million in H1. Given what happened to FX in the last few months, particularly the dollar and the renminbi appreciation, how do you think about that FX impact in the second half? And perhaps, also it release a little bit of pressure from you to delay any pricing into next year.
Cecile Cabanis : Thank you, Thomas. So to answer your question on client dynamic for F&LG in the second quarter versus last year, the bulk of the growth came from the Americans who are up high single digit. Koreans also contributed, but obviously, it's a smaller base, so the impact is more marginal. You had a negative impact from Middle Eastern, but not higher than Q1 as the longer duration of the impact was offset with improving sequential and gradual trends. And then European, Japanese and Chinese were flattish. So that's for the clientele in Q2. On FX impact, so H1 was around 70 bps. So as you said, it was in line with what we had projected. We do expect that on the revenue part, we could have a slight positive impact from FX going forward on revenues. However, probably offset by a perimeter impact because there are more sales at operations that are going to get closed in H2. However, on the margin, we still expect approximately the same impact that we had in H1, especially if you take Wines & Spirits given the stock duration and the time lag between the time you put it in stock and you read it. You are still going to recycle impact from last year, and you already had your hedging gain. So there's a bit of time impact. It's a bit technical, but that means that on the margin, probably we are looking at the same impact for H2.
Antoine Belge : It's Antoine at BNP. Three questions, if I may. First of all, I'd like to come back on the performance on the Chinese cluster, so the flat but unchanged quarter-on-quarter. If my memory doesn't fail me, last year, the Chinese cluster 1 from down maybe 9% to down mid-teens. So isn't it a bit disappointing that on easier comps, China not improving? And so if you could comment on the litigation between Louis Vuitton and these companies, is it having any impact? Second question is about overall H2 and this idea that the comp base will become tougher. The recovery of the group started in Q3. So how should we think about that? Are you confident that maybe -- I mean, you are mentioning that you could expect sort of sequential improvement at Europe. So any or so pipeline initiatives at Vuitton, especially in the base of H2 last year? You've got the -- both in Shanghai. And finally, on the margin, first of all, congratulations because the margins were well above consensus. Especially this idea that with a flat organic growth in H1, you managed to have a flat margin at constant currency. So is it like the result of a special effort because you know that H1 will still be a bit under pressure. Or is it a bit something a bit more structural? Because if growth come back, I mean, I guess maybe investment will come back as well. And a clarification because I think Rodolphe on Wines & Spirits mentioned that -- something you confirm on the top line, which would be that maybe H2 growth would be a bit less than in H1, but did I understand correctly that the margin over the full year would be rather flattish year-on-year versus up in the first half?
Cecile Cabanis : Thank you, Antoine, for all these questions. So on the Chinese cluster, net-net, what we've seen in H1 is that Chinese local and touristic demand has been flattish. We have been seeing an improvement of offshore demand over the Q2. So you have local demand outperformed in Q1 and onshore demand outperforming in Q2. We are not changing the fact that the basis of comps was easier in Q2. But when it comes to Chinese, we need to look at it. And especially, we need to remember that the easier basis of comp of Q2 last year was linked to exceptional growth in Japan in 2024, which was recycled. So I think it's important to have that in mind. What we are seeing is that Chinese local consumption is high by historical standard. What we are already seeing is that Chinese demand is increasingly clustered around a shopping event. So it's important to follow that in order to have the right trends. On your question of litigation, I'm sure you agree that is an absolute key asset for us, and we diligently protect our brands. Our Maisons handle trademark infringement in many countries very regularly, including China, but not only. This case received media attention. It's still a legal process, so I will not comment more than that. On the comp base of Q3, maybe I should have linked it to the previous one. So first, we are only a few weeks in July, and July is a small month. So I will not comment on trends for H2 because it's much too early. The comp base in H1, in H2 is optically tougher than H1. But it's also on the base of easier comps in '24. So overall, it's quite similar. And on the rest, I already commented answering previous question on what we see for the [ FX ]. On margin, we take your congratulations. Thank you very much. There has been, of course, an effort on discipline and particular cost attention in order to come to this result, and we are very happy to have managed it. And then I think you were referring to a comment of Rodolphe for Wines & Spirits regarding the full year margin. So indeed, you understood it well. We believe that overall full year margin in Wines & Spirits will be comparable to last year. Bear in mind what I was explaining on FX as well, which will impact H2, especially in Wines & Spirits in terms of margin hit.
Erwan Rambourg : Congratulations on the margin. I hope you can hear me. Three short questions. Firstly, on Sephora, I was wondering if you could maybe help us understand what part of the growth is linked to like-for-like in the different regions and what part is maybe linked to the impact of openings? How much does that weigh? Secondly, I had a question on Tiffany. You were saying you've revamped 40% of the store base. I'm wondering what's next? And presumably revamping the store base was weighing on margins. I suspect that with the type of growth you're getting, margins are going higher. Does that change your cadence in terms of revamping other stores? How should we think about that prospect? And then thirdly, if I understand correctly, Celine and Fendi are probably still negative. Can you tell us about the prospects of when that might improve for those two brands and what it would take?
Cecile Cabanis : Thank you, Erwan. On Sephora, when we look at the growth, it's probably half-half in terms of expansion. It's not only country opening, it's service expansion and like-for-like. We've seen a very sustained growth in all markets, including the U.S. especially on exclusive brand. I remember we had the launch of [ Road ], which is still going very well. In terms of country openings, we have opened Belgium, Croatia and Ireland. So we'll continue, and we have continued to open in the U.S., which is a market that is going very well for Sephora. Tiffany, so on Tiffany, yes, the transformation and the stores, as you mentioned, is weighing on the margin because it increased the selling cost. It's not the only one. You can imagine as well that the transformation of the portfolio with the decrease in silver is also creating a short-term headwind on the margin. But you're right to say that with the increasing growth and the performance of the icons and soon, let's hope, the decrease in gold price, we will be able gradually to get leverage in order to improve the margin. We have not changed the program when it comes to store renovation, and we'll continue to do, the reason that we discussed several times. Overall, 10% or more per year because we still want to do it gradually. It's not only an issue around margin. It's also making sure we do it well and we do it gradually. On Celine and Fendi, we see progress quarter-to-quarter. On Celine, there has been some innovation in soft bag like the soft cream and other formats that are doing very well. Shoes are doing well. Ready-to-wear is doing well. So it's really progressing, and Fendi started later. We had the show of [ Mario Garcia ] again early July, but we see improvement already. So we are very confident that these two brands will continue to make progress.
Edouard Aubin : Two quick ones. Just to follow up on the margin actually for Fashion & Leather Goods. So still, just -- you managed to have an ex FX flat margin on the minus 1% constant FX decline in H1. Hypothetically assuming that you would be in a situation to grow your top line by mid- to -- low to mid-single digit as consensus is currently expecting, should we therefore assume that you should be able to post some operating leverage, excluding FX in H2 for Fashion & Leather Goods? So that's question number one. And then on the Perfume & Cosmetics division. So the division was basically again more or less flattish in -- for the H1. Kind of -- which has been a pattern of low growth in the past few years and I think, below some of your prestige. Kind of, how do you explain the relatively sluggish top line performance for the division in the recent quarters?
Cecile Cabanis : Thank you, Edouard. So on the margin, hypothetically on your assumption, maybe I'll come back to what I -- the message that I repeat often, which is for the group, probably once we reach 3% to 4% growth, we are starting to get operating leverage. So it's true that H1, we managed to do it with less than that with extra effort on discipline and cost, and it's great results, but it doesn't make it a rule. So we continue to -- my message is not changing and stays. On P&C flat, what I would say is that we have made a choice with Perfume & Cosmetics and some of our brands to be very selective in distribution, to pay a lot of attention of promotions. So there could be some areas and opportunities of short-term growth. But for us, it probably would mean damaging the brand equity, and we want to build -- to continue to build the brand desirability and equity for the long term. So we've been working hard in order to be very selective on distribution, and we are still impacting -- impacted as a result by travel retail performance.
Oliver Chen : Regarding the U.S., we've seen really good momentum here as well as you have seen that, too. What's happening with the tourism in the U.S. versus local? And the equity markets have been strong here, but what should we know, as it was a rapid acceleration that you saw? Second, Cecile, on your comments on China shopping events getting more clustered, what does that imply for how you're thinking about longer term? You've done a great job with highly experiential Chinese stores and also investing in the stores. And third, the marketing and selling expenses were impressive and how you manage those. How are you balancing your management of that versus long term, and what should be done to perpetuate that? And then finally, on artificial intelligence, we're seeing a lot of innovation there and a balance in terms of magic versus logic. And Vuitton's had a rich history of managing inventory quite tightly. But what are your philosophies or frameworks towards approaching AI and personalization and supply chain?
Cecile Cabanis : Thank you, Oliver. So on U.S., the good momentum in Q2 was both. So we had great momentum in local and an acceleration of tourism on top of that. That's why you see the U.S. market growth accelerating between Q1 and Q2 Well, in Q1, we still had some impact from tourism linked mainly to exchange rate, but it has -- the trend has reversed in the second quarter. On China, my comment is not deriving to having any kind of structural conclusion. It was rather to comment that we should be careful with very short-term trends. As you might have some weeks where it moves, but you have also purchased that are more clustered. So you need to ensure that you have sufficient period of time in order to really analyze the demand. But for us, there's no specific things. We are already, as you said, both in terms of experience in store, both in terms of ensuring that we have brand activation at those moments. I think we'll continue to do what we've been doing, and that has been quite successful. Balancing cost versus marketing, it's obviously something we are very vigilant around. And we make sure that wherever we need it, we invest in the brands. When you go for creative renewal, for example, with Jonathan on the sand, you will invest in your brand, you activate, and that's very clear. So it's really not a marketing or margin. Where we are going to find efficiency is -- you mentioned on your AI question, it's on [ sales growth through ], improving your [ sales growth ], for example, time to market, improving the brief, lowering your stocks will have tremendous impact in terms of profitability and can also help you reinvest. And then we are looking really around costs that are not cost where it's investing for the clientele service quality that we will never bargain, you can trust us on that. Then on AI, there are several initiatives on AI because you can really leverage it in many areas. I think on some calls, we were discussing about clienteling and how you can really make the relationship and the conversion much more efficient. On supply chain, you're right that there are also opportunities both for demand forecast, but also prototyping and time to market that we can leverage. So we are really using -- and by the way, also on corporate function and cost management. So we are really leveraging all of them in all our Maisons.
Luca Solca : Luca Solca from Bernstein. Maybe stepping back and looking at the Fashion & Leather Goods division and in particular, at the core brands, Vuitton and Dior. It's been unprecedented that for a few quarters, 7 quarters or so, organic growth has been as low as we've seen and sometimes negative. I wonder what your analysis, what your diagnosis is what is causing this? What is it that is missing in the market? What is it that is missing in your execution, you think? And where do you stack against some of your competitors? Would you say that at the moment, in these categories, you're getting market share gains or you're losing market share? One of my thoughts is that you're actually, as the rest of the industry missing middle class consumer demand, price increases. [ Boscow ] have made some of the products more difficult for them to buy. The lackluster and polarized consumer demand environment is causing middle-class consumers to be on the back foot and core mega brands like Vuitton as well as the managed have to deal with this thing, how you're adjusting pricing and assortment as a way to address this issue, assuming that you're sharing this diagnosis and the this hypothesis of the underperformance?
Cecile Cabanis : Thank you, Luca. So maybe because Dior and Vuitton is not exactly the same, to be concrete on what we're seeing, I will take one, and then the other. On Dior, you might have listened to some interviews of [ Delfina ] and Jonathan Anderson that they had in the first half, we are aiming to build lasting momentum. Lasting momentum is not meaning you don't yield short-term benefits. But the reverse is not true. So today, we are very encouraged by the short-term results. I mentioned a few of them. On Dior, all key clienteles are up in H1, double-digit for Americans, and Japan and Japanese in Q2, that all accelerated. We have very strong ready-to-wear for women performance and very strong momentum in bags, both on the newness that have been proposed by Jonathan Anderson, but also on some other lines that he has reinterpreted, including icons like [ Toledo ]. So we've made a lot of progress. The collections are super successful. What we are offering is getting success, and there will be more to come. It's 2 quarters that we started a creative renewal. On Vuitton, you know that we decided this year to put the 130 years Monogram as a key feature. And what we are seeing is that it's leading into good momentum for the Monogram. And both in the iconic shapes like the [ Alma ] and the Speedy that are back to growth, but also in some new shapes that I will talk about on your comment regarding clientele pyramid. We have launched a new Monogram Embleme collection that is also doing well. We have good momentum on ready-to-wear women, jewelry and perfume. You know that we've been opening some very unique experiential stores and flagship that are doing very well. And lastly, maybe something you know less is the kind of ephemeral initiatives that we had like the hotel in London, which has also happened to be a commercial success. So that's for Vuitton. On the question regarding are we missing middle class, I would make two comments. The first one is that -- and I think it's a good news for our industry is that wherever there is wealth creation, which we have seen in the U.S., which we have seen in Korea, there is a strong appetite for luxury and a strong appetite our goods all across clients. And the second because you're right, we said and we've been discussing this, we said that it's very important to continue to nourish the pyramids, so boost the very exclusive client and aspirational because we need to continue to recruit. And if you take Vuitton, it's not a new strategy per se. And what we -- I can take some example in H1. If you take H1, you have the P9, which is very expensive, very exclusive, where the waiting list is continuing to grow. So that would be for addressing the very exclusive high net worth individual. And then you have -- we've launched some new forms of bag like the [ squares ] and the [ multipass ], which are successful and will be addressing a more aspirational part of the clientele. And then we have all the double-end strategy. We already discussed quite a lot. So we've made great progress. I think it's good that we are back in growth and we have plenty of initiatives that are resonating well with clients.
Victoria Petrova : My first question is on the [indiscernible]. I think it was asked, but can you repeat if [ Louis ] should inflate comps for China in the third quarter or it's immaterial? And also from our conversation during pre-close, it looks like MENA has been improving through June. Could you provide any color on the exit rate? Or how we should think about MENA in the third quarter, what's your base case scenario? And finally, is there any specific phasing on costs overall, but also related to Watches & Jewelry division on the refurbishment of Japanese stores?
Cecile Cabanis : Thank you. So on the comps in Q3, what I commented is overall, we have a more difficult basis of comp than what we had in Q2. But because it's mirroring easier comp in '24, actually, it's probably quite comparable. On Middle East, indeed, we had 1 point of impact in the first quarter, which was only on 1 month where commented that the month of March was down 50% plus. We have still 1 point of impact in the second quarter, but over a longer duration. So we have seen regular and gradual improvement. Also, we are exiting the quarter still negative but much more muted than when we entered the quarter. It's still very much unknown as to how this is going to develop. So we continue to monitor the situation carefully. And then on the cost overall, you've seen our income statement. So you've seen that we've been very disciplined in making sure that the costs are managed actively, both in marketing and selling, but also in G&A. On Tiffany, we were able to improve the margin despite several headwinds because you had the price of gold. You had also the increase in selling expenses from the expansion and the renovation of the stores. And you had some headwind from the legacy, but still because we've been able to accelerate in terms of growth. Because the AUR has increased a lot, we were able to improve the margin.
Rodolphe Ozun : We'll take another two questions.
Jean Danjou : I have two questions. The first one is on China and cognac. It seems that the demand is improving in China, but you mentioned it was at the low end with the SOP. Could you maybe -- if you think this is a structural improvement and at last recovery or if it is more short term? And then the second thing, there is obviously a big up in growth between Fashion & Leather and the jewelry part then the [ Galleria ], 10 points. I wonder whether some geographies explain most of this gap, for example, U.S. and Korea? Or is it evenly distributed between geographies?
Cecile Cabanis : Thank you. On China cognac, so yes, Rodolphe commented on the improving trends. We have also seen improving trends in [ IX ]. And overall, to your question on is it short term or is it going to last, what I can answer is it's not sell in. So it's not like we're stocking. We are sell in and sell out that are quite line, and the stocks are much healthier than they used to be. On the difference between Fashion & Leather Goods and Watches & Jewelry growth rate, there are probably not 1 big explanation and 1 size fits all. But in terms of geographies, if we look at Watches & Jewelry, where it accelerated the most is U.S. Japan and Korea indeed.
Chiara Battistini : I just have a couple of follow-ups, actually. The first one on back on Fashion & Leather Goods. I was wondering if you could share with us the price mix and volume dynamics for Q2? And second question, very quickly. Did you have any to refund for the U.S. duties at all? And should we expect anything to come on that front?
Cecile Cabanis : Thank you, Chiara. So price, vol mix for F&LG, if you look at Q2, it's 1% growth. If we exclude Middle East impact, it's 2% growth. We have moderate price so you can assume that vol mix overall was flat, no big moves there. And in terms of U.S. duties, we got some refund, but it's only a few basis points to the margin at this stage. So unfortunately, much less than the currency, very significant impact, negative. And I think we stop there, Rodolphe. Thank you very much for all your questions, for your attention. Again, it was a very solid set of results. So we are happy for that. And for those I will not see, I wish you a very good summer. Thank you.
Rodolphe Ozun : Thank you.