Exterior of a luxury Louis Vuitton LVMH boutique in Paris
by Mimosa Spencer
The French group LVMH reported Thursday organic growth of 10% in its turnover in the fourth quarter, driven by the resistance of demand for its high-end fashion brands.
The world number one in luxury, which owns, among others, the brands Louis Vuitton and Dior as well as the cognac Hennessy and the jeweler Tiffany, posted sales amounting to nearly 24 billion euros over the October-December period.
This is organic growth higher than the expectations of analysts, who expected on average 9% according to a consensus cited by HSBC, i.e. the same level as in the third quarter which marked a clear slowdown compared to the first half of 2023. .
“The most high-end products are those with the highest demand in the world,” LVMH Chief Executive Bernard Arnault told analysts, citing products from haute couture brands such as Christian Dior. .
Bernard Arnault added that he was satisfied with the group’s growth rate and said he was “very confident” for 2024.
Spending by Chinese consumers in Louis Vuitton stores in Europe reached 70% of the 2019 level, i.e. before the health crisis, financial director Jean-Jacques Guiony said during a press conference.
“We generated a good level of activity with bases of comparison which were not so simple last year, particularly in December, with a very good level of activity, so in terms of demand we are quite satisfied” , did he declare.
After a post-pandemic surge that fueled more than two years of spectacular sales growth in the luxury fashion sector, consumers have cut back on purchases, particularly younger, less wealthy and more health-conscious customers. rising inflation.
Considered a barometer of the luxury sector, LVMH does not communicate detailed results for its brands.
Barclays analysts expect growth of 5% for all companies in the luxury sector in 2024, compared to 9% last year and double-digit growth in the previous two years.
Spending by Americans and Europeans remains moderate, according to analysts, and has only been partially offset by the return of Chinese tourists after periods of confinement.
Regarding LVMH’s fashion and leather goods division, which includes the major brands Vuitton and Dior, sales increased by 9% on an organic basis, below the expectations of analysts who were counting on growth of 10%.
LVMH is proposing a dividend of 13 euros per share, compared to 12 euros the previous year, and expects continued growth next year, despite a troubled macroeconomic and geopolitical context.
“The current quarter should benefit from a strong Chinese recovery and a consolidation of consumers,” said Jelena Sokolova, an analyst at Morningstar. “We continue to view Chinese demand as a positive for luxury,” she added.
(Report by Mimosa Spencer; French version by Stéphanie Hamel, edited by Blandine Hénault and Jean Terzian)