LVMH, the renowned luxury goods group behind iconic brands such as Louis Vuitton, Dior, and Tiffany, has announced a solid 10% increase in sales for the fourth quarter of the year. This growth surpasses the previous quarter and can be attributed to the strong demand for its high-end fashion labels.

The sales figures for the world’s largest luxury group reached an impressive 24 billion euros ($26 billion) in the final three months of the year, excluding the impact of currency fluctuations and acquisitions. This remarkable performance has exceeded analysts’ expectations of 9% growth, as revealed by HSBC’s consensus. To provide a comparison, in the third quarter, LVMH witnessed a 9% increase in sales, while in the first and second quarters, the growth stood at an even more impressive 17%.

In the wake of the post-pandemic period, there was a surge in sales for high-end fashion companies. However, consumers, especially the younger and less affluent demographic, have begun reducing their expenditure due to rising inflation. Given that LVMH operates across several industries, including spirits, jewelry, cosmetics, and fashion, its performance is often seen as an indicator for the broader luxury sector. Analysts at Barclays have predicted a 5% growth for the high-end luxury sector in the current year, a decline from the 9% growth observed in the previous year and the double-digit growth noted in the two years before that.

Sales from American and European consumers continue to be subdued, with only a partial offsetting effect from the return of Chinese tourists post-lockdown. LVMH’s fashion and leather goods division, which encompasses its renowned brands like Vuitton and Dior, experienced a 9% growth during the quarter, slightly lower than the anticipated 10% increase.

Despite the prevailing uncertain macroeconomic and geopolitical factors, LVMH remains optimistic about its growth prospects for the upcoming year. The company has proposed a dividend of 13 euros per share, an increase from the previous year’s 12 euros. Experts are of the opinion that the strong recovery and consumer demand in China will contribute to the growth in the coming quarter, painting a positive outlook for the luxury industry on a global scale.

Useful links:
LVMH Official Website
LVMH’s Performance Amidst the Coronavirus Pandemic