The French luxury conglomerate LVMH Moët Hennessy Louis Vuitton, commonly known as LVMH, posted impressive fourth-quarter 2023 revenues, defying the overall slowdown in the luxury sector. Despite a broader decrease in demand, the high-end fashion conglomerate experienced a 10% increase in sales, showcasing the resilience of brand-loyal customers against inflation.
Shares of the world's largest luxury group surged by 15% during the European trading on Friday, reflecting the positive market response to its robust performance.
What’s the secret behind this success? The earnings calendar may shed more light on the company's financial standing. The heavyweight in high-end fashion revealed solid figures for fourth-quarter revenue, with a 5.5% year-over-year growth to €23.9 billion. This surpassed analysts' expectations of around €23.6 billion. However, the owner of 75 brands, including Christian Dior, Fendi, and Tiffany, did not disclose earnings per share for the fourth quarter. Full-year profits amounted to €30.33, falling slightly below consensus calls of €31.29 per share.
Europe, Japan, and the rest of Asia demonstrated double-digit organic growth, contributing to an overall organic revenue growth of 10% in the fourth quarter. Profit from recurring operations reached $24.71 billion for 2023, marking an 8% increase. The current operating margin remained stable compared to 2022, and the group's share of net profit rose to $16.48 billion, up by 8%.
Bernard Arnault, chairman and CEO of LVMH, emphasized the exceptional appeal of their Maisons and their ability to generate desire despite economic and geopolitical challenges. He stated, "Our growth strategy – based on the complementary nature of our businesses, geographic diversity, and a commitment to innovation, high-quality design, and retail excellence – adds a cultural and historical dimension thanks to the heritage of our Maisons."
In the midst of a wider sales downturn in the luxury goods sector, CEO Bernard Arnault is orchestrating a board reshuffle as part of his succession plan. Two of his sons, Alexandre, 31, and Frédéric, 29, have been nominated for board seats and will face a vote in April. If successful, they will join their siblings Delphine, 48, and Antoine, 46.
