Defying Expectations of a Luxury Slump, LVMH Grows Q4 Sales and Achieves a Record Year
Defying predictions of a slump in the luxury market due to anticipations of economic recession, LVMH shared that organic sales for its key fashion and leather goods division rose 9 percent in the fourth quarter. This aligns with market expectations and signals a steady normalization of growth rates for the world’s largest luxury group, even as it simultaneously announced record full-year revenues for 2023.
In results reported after the market close on Thursday, the company also said overall group sales rose 5.5 percent at actual exchange rates to 23.95 billion euros in the fourth quarter, following a 1 percent increase in the previous three months. This follows a 1 percent rise in the preceding three months. On a like-for-like basis, the growth reached 10 percent, surpassing the 9 percent recorded in the third quarter and exceeding the consensus forecast of 8.6 percent growth by financial services firm Morningstar.
The impressive expansion is attributed to the strong performance of LVMH’s selective retailing and perfume and cosmetics divisions. The quarter benefited from a more favorable comparison basis with the same period the previous year, when significant parts of China were under COVID-19 lockdown measures.
The owner of Louis Vuitton, Dior, Tiffany & Co., and more reported a total sales increase of 8.8 percent for 2023, reaching 86.15 billion euros for the entire year.
“Our performance in 2023 illustrates the exceptional appeal of our maisons and their ability to spark desire, despite a year affected by economic and geopolitical challenges,” LVMH chairman and chief executive officer Bernard Arnault said in a statement from the company.
“While remaining vigilant in the current context, we enter 2024 with confidence, backed by our highly desirable brands and our agile teams. It promises to be an inspiring, exceptional year for us all, featuring our partnership with Paris 2024 Olympic and Paralympic Games, whose core values of passion, inclusion and surpassing oneself are shared by our group,” he added.
The announcement arrived just after a series of strategic reshufflings in LVMH’s senior management ranks. Last week the group announced that Michael Burke would succeed Sidney Toledano at the head of LVMH Fashion Group, overseeing Celine, Givenchy, Kenzo, Loewe, Marc Jacobs, Patou, and Emilio Pucci – a portfolio that will expand to encompass more brands, including Fendi. Toledano will leave the LVMH executive committee and become an adviser to Bernard Arnault in the handover, which takes effect on February 1. It’s the latest in a series of management changes, which has also seen Frédéric Arnault promoted to CEO of LVMH Watches.
The news of LVMH’s strong performance comes amid mixed results for other luxury fashion groups. Burberry lowered its full-year profit guidance after disappointing holiday sales, but Richemont beat expectations thanks to its strong brands in the jewelry category. Hermès and Kering are set to share results in the first two weeks of February.
