A $93.34B smile: LVMH 2023 earnings boosts luxury sentiment

What Happened In a display of resilience, LVMH saw its shares surge by over 8 percent on Friday morning. This leap came in the wake of the group announcing its 2023 sales, which not only surpassed analyst forecasts but also showcased an impressive 13 percent organic growth from the previous year, reaching a staggering $93.34 billion (86.15 billion euros) in revenue. The luxury behemoth, which houses esteemed brands such as Louis Vuitton, Dior, Moët & Chandon, Hennessy, Givenchy, Loewe, Tiffany & Co., Bulgari, and Sephora, reported a commendable 10 percent rise in organic revenue in the fourth quarter alone. A notable 14 percent annual growth in the crucial fashion and leather goods sector bolstered these figures, alongside an 11 percent uptick in the perfumes and cosmetics segment. However, the wines and spirits division saw a 4 percent decline. The Jing Take The luxury sector, which experienced a surge during the pandemic, faced a challenging 2023, with macroeconomic slowdown in key markets like China and the US, as well as global geopolitical unrest. Despite these headwinds, LVMH's fashion and leather goods division, which includes industry stalwarts like Louis Vuitton, Dior, and Celine, secured greater global market share, reaching unprecedented revenue and profit heights. The performance was boosted by sales in Asia, including China, which accounts for 31 percent of the conglomerate's total sales. Despite the shadow of the pandemic, LVMH has doubled its Chinese clientele since 2019, prompting iconic brands in the group to increase their footprint in the country. Bernard Arnault, chairman and CEO of LVMH who was also momentarily the world's richest man in 2023, remarked yesterday on the group's reliance: “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,” he stated. Arnault singled out: “Louis Vuitton and Christian Dior’s spectacular fashion shows, Tiffany’s reopening of ‘The Landmark’ in New York, and the ever-growing popularity of Sephora’s store concept worldwide” were strategic milestones that helped boost performance last year. Arnault also emphasized the group's strategy of “geographic diversity,” its diverse product sectors, “retail excellence,” and the “cultural and historical dimension thanks to the heritage of our Maisons,” as key factors for growth. Dior's Sauvage reaffirmed its status as the world's top-selling fragrance in 2023, underscoring a high-performing year for beauty and fragrances, while Tag Heuer, Tiffany & Co. drove hard luxury inroads. This year has been big for LVMH. From being the first European company to break the 400 billion euro market barrier to the group's executive reshuffles, along with expansion into China's beauty R&D sector and thoughtful localized activities among its brands, there's been much effort made to stay in luxury consumers' good graces. With Louis Vuitton's global Kusama activations and Chinese New Year dragon sculptures, coupled with the onboarding of Pharrell Williams to lead the brand's menswear, it has been a year filled with positive headlines for key labels in LVMH's portfolio. Such positive earnings results, on the back on Richemont's most recent earnings showing a revenue surge in China, indicate a positive momentum for luxury at large during still challenging global conditions. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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A $93.34B smile: LVMH 2023 earnings boosts luxury sentiment