Dive Brief:
- LVMH Moët Hennessy Louis Vuitton reported revenue of 86.2 billion euros in 2023, or approximately $93.7 billion at current exchange rates, representing a 9% increase from 2022’s revenue of 79.2 billion euros, according to a Thursday press release.
- The company reported record net profits of 15.2 billion euros, an 8% year over year rise from 14.1 billion euros in 2022. The company’s fashion and leather goods division, which is its largest, saw a 9% year-over-year revenue boost to 42.2 billion euros, and a 7% net profit increase to 16.8 billion euros.
- Bernard Arnault, chairman and CEO, also moved to deepen his family’s control of the company by nominating two of his children, Alexandre Arnault and Frédéric Arnault, to fill vacant seats on the company’s board of directors, according to a separate press release, which noted that the board will vote on the nominations in April.
Dive Insight:
The positive earnings report had a ripple effect throughout the luxury industry. Reuters reported on Friday that the pan-European STOXX 600 index “was up 0.9%, hitting its highest level in two years” following LVMH’s results, and the top 10 European luxury stocks “gained 3.8%, tracking its best day since November 2022.”
LVMH said its fashion and leather goods division, which includes Louis Vuitton, Christian Dior, Celine, Fendi, Loro Piana, Loewe and Marc Jacobs, “gained market share worldwide and achieved record levels of revenue and profits.” After declines in Q2 and Q3, LVMH’s fashion and leather goods division posted Q4 a revenue of 11.3 billion euros, making it the company’s strongest quarter for the year in any division.
The company touted the success of Louis Vuitton womenswear Nicolas Ghesquière, who “renewed his contract for a further five years.” It also celebrated the July 2023 Paris debut of Pharrell Williams as creative director of Louis Vuitton menswear, whose show “sparked enthusiasm worldwide,” per the release.
“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,” Arnault said in the release. “...2023 also saw us make progress in several key areas that are essential components of our long-term vision: protecting the environment, developing our talent, and preserving and passing on our expertise. While remaining vigilant in the current context, we enter 2024 with confidence.”
The results represented a promising improvement after the market slowdown in Q3, according to Alice Price, associate apparel analyst at data and analytics firm GlobalData.
“While this uplift is partly due to more favorable exchange rates…it also affirms the desirability of its product offering, as it continues to persuade consumers to make purchases against a backdrop of subdued consumer confidence in Europe and the US,” Price said in emailed comments.
She added that Japan was LVMH’s strongest region in 2023, followed by the rest of Asia, “driven by their growing economies and heightened appetite for high end goods since the removal of lockdown restrictions at the end of 2022.”
Meanwhile, Price said Europe’s low-double digit growth was “supported by the resurgence of international travel, but slowed significantly throughout the year to just 5% in Q4, as inflationary challenges impacted domestic demand.” Sales in the U.S. increased 4%, which Price attributed to low consumer confidence and aspirational shoppers reigning in their discretionary spending.
“However, US revenue rose by 8% in Q4 versus 2% in the prior quarter, indicating hope for its performance in the year ahead,” Price said.
Looking ahead to 2024, Arnault said the company was optimistic about its prospects.
“While the geopolitical and macroeconomic environment remains uncertain, LVMH is confident in its ability to continue to grow in 2024, in the highly distinctive quality and creativity that its products offer its customers, as well as in the professionalism of its management, to stand out and gain market share,” Arnault said. “LVMH will pursue its brand development-focused strategy, underpinned by continued innovation and investment as well as an extremely exacting quest for desirability and quality in its products and their highly selective distribution.”
