LVMH Surpasses Analyst Expectations with 9% Sales Growth Amid Rising Chinese Demand

Summary

  • The largest luxury conglomerate worldwide, owner of iconic labels like Louis Vuitton, Dior and Tiffany, saw near €24 billion ($26 billion) sales in the last quarter of the year, barring currency shifts and acquisitions.
  • Overall sales increase of 9% exceeded market anticipations, a figure cited by HSBC.
  • Strong sales performance was seen particularly from Chinese customers, despite trends showing consumers gradually reducing their purchases.
  • LVMH, with a diverse portfolio including spirits, jewellery, cosmetics and fashion, is considered a key indicator of trends in the broader luxury sector.
  • The robust financial performance, despite a challenging macroeconomic and geopolitical climate, speaks volumes about the strong recovery in Chinese markets and the resilience of global demand for high-end luxury products.

Sales Performance

LVMH, the global leader in the luxury realm with coveted brands like Louis Vuitton, Dior, and Tiffany under its umbrella, reported sales hovering around €24 billion or $26 billion in the last quarter. This figure, which does not account for currency fluctuations and acquisitions, slightly outperformed the forecasted 9% sales growth as per HSBC consensus.

Growth Momentum

In consecutive quarters of last year, sales rose by 9% and 17%. The CFO, Jean-Jacques Guiony, acknowledged the favorable sales situation stating, “We are quite satisfied with our performance and demand projection, especially given the tough competitive climate in December.”

Addressing the media, Guiony also confirmed continued strong demand from Chinese customers. Sales in LVMH’s fashion and leather goods division, including top labels Vuitton and Dior, rose by 9%, just short of the 10% growth projected.

Future Projection

The luxury giant has proposed a dividend of €13 per share, which signifies a slight increase from the €12 a year prior. Despite an unpredictable macroeconomic and geopolitical environment, LVMH anticipates maintaining its growth trajectory in the forthcoming year.

Highlighting the widespread positive economic indicators, Jelena Sokolova, senior equity analyst in consumer discretionary and luxury goods at Morningstar, said, “We expect the solid rebound in the Chinese market and consumer base to contribute to strong quarter results.”

The currency conversion rate employed in these estimations is $1 = 0.9217 euros.

These performance metrics of LVMH and predictions roughly correlate with forex or trading trends, particularly aiming at luxury assets or the euro-based assets.

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