PARIS — LVMH Moët Hennessy Louis Vuitton, riding the momentum of the luxury category, reported a 16 percent gain on Thursday in second-quarter sales as first-half revenue climbed 8 percent to $6.97 billion, or 5.68 billion euros. Sales figures have been converted at average exchange for the corresponding periods.

Chairman Bernard Arnault’s French conglomerate said operating income will jump above 12 percent for the half and promised a “significant” full-year EBIT (earnings before interest and taxes) gain. Like most firms here, LVMH reports sales and profits separately. It is scheduled to provide its income statement on Sept. 15.

On a comparable basis, sales rose 19 percent in the second quarter, driven by robust champagne and cognac purchases, a strong selective retailing performance and continued double-digit growth at the star Louis Vuitton brand.

Sales exceeded most analysts’ expectations. But provisional operating income was slightly below consensus projections, taking LVMH stock down 2.8 percent to close at $70.07, or 57.25 euros, in trading on the Paris Bourse.

Nonetheless, the accelerated second-half trend — LVMH sales rose 1.7 percent in the first quarter — provided the latest evidence that European luxury firms from Gucci to Burberry are poised to gain steam going into the second half. Last year, LVMH’s net profits increased 30 percent to $818.2 million, or 723 million euros.

“All businesses are growing in the more favorable environment,” said Patrick Houel, LVMH chief financial officer, in a conference call. “We believe the trend will continue in the second half and we are targeting significant growth for the year.”

Second-quarter sales were up 2.83 billion euros, or $3.47 billion.

HSBC analyst Nathalie Schneider estimated organic sales rose in the “20 percent region in May and June,” after a 15 percent gain in April. “We rate this a very strong showing,” she said.

Double-digit like-for-like growth at Louis Vuitton was driven by a 50 percent sales surge in the U.S., increasing numbers of tourists and blowout products such as the multicolored Theda bag.

Analysts said additional products, including a jewelry line designed by Marc Jacobs and the Bellaix luggage line, as well as store openings in Shanghai and on Rodeo Drive in Beverly Hills should spark even stronger Vuitton sales in the second half.

This story first appeared in the July 23, 2004 issue of WWD. Subscribe Today.

Arnault told WWD in May that “there is still room for growth. And Vuitton has the biggest potential because demand exceeds our production capabilities.’’

Vuitton business advanced across all geographical zones, except in luxury’s key Japanese market, Houel said.

While sales grew slowly on the island nation itself, despite recent price cuts to reflect the lower value of the yen, sales to Japanese customers advanced at double-digit rates as they increased travel to destinations in the U.S. and Asia, he said.

LVMH said Vuitton expanded about 10 percent in Europe, equally bolstered by a returning tourist trade.

Overall, the fashion and leather division, including the Fendi, Pucci, Marc Jacobs, Christian Lacroix, Loewe, Celine and Givenchy brands, reported sales growth of 7 percent to $2.49 billion, or 2.02 billion euros, and LVMH said efforts continue to revitalize Fendi and Donna Karan, which is being made more selective.

Fragrance and cosmetics sales of $1.19 billion, or 973 million euros, were flat for the half, deflated by adverse currency exchange rates and divestitures, including the sale of the Bliss brand and the Michael Kors and Marc Jacobs fragrance licenses.

LVMH said third-quarter fragrance sales should profit from a trio of men’s colognes at Dior by Hedi Slimane, Dior’s new Pure Poison and a new Guerlain men’s scent.

Watches and jewelry sales gained 12 percent to $288.3 million, or 235 million euros, while the selective retailing arm, including DFS duty-free shoppers and the Sephora perfumery chain, grew 14 percent to $1.89 billion, or 1.54 billion euros, taking advantage of recovering travel flows.

“The main positive surprise came from the two most important divisions: fashion and leather goods and selective retail,” said Goldman Sachs analyst Jacques-Franc Dossin in a note. “We also see very strong [business] in the watch and jewelry division, which bodes well for…Swatch and Richemont.”

LVMH said its wines and spirits division, spurred by China and Taiwan, recorded a 14 percent increase in sales to $1.12 billion, or 912 million euros.