The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
LVMH, the world’s largest luxury company, reported a 17 percent rise in first-quarter sales, more than double analysts’ expectations, as China rebounded sharply after Covid-19 lockdowns.
Sales at the French company, which owns the Louis Vuitton and Dior fashion houses, as well as Hennessy cognac and U.S. jeweller Tiffany, came to €21.04 billion ($23.10 billion) for the three months to end-March.
The 17 percent growth on an organic basis, which strips out the effect of currency fluctuations and acquisitions, compared with analysts’ expectations for 8 percent growth, according to a Visible Alpha consensus.
The figures for LVMH, a bellwether for the high-end industry that has proven resilient to rising inflation and market turmoil, offered the first snapshot of the scale of the Chinese recovery after lockdowns dented sales at the end of 2022.
LVMH said first-quarter sales grew by 14 percent in Asia, excluding Japan, compared with an 8 percent decline in the fourth quarter of last year, and the group said it expected China to drive growth in 2023.
The picture was more mixed in the United States, where the strong demand that boosted European fashion houses last year shows signs of waning, particularly among younger, lower-spending shoppers.
US sales grew by 8 percent in the quarter, more than analysts had expected, but LVMH finance chief Jean-Jacques Guiony said most of that growth was down to brisk business at its less exclusive Sephora retail chain of beauty stores.
“For the rest, the business is slowing down a bit,” he said, citing softer demand for fashion and leather goods, as well as jewellery.
LVMH made 27 percent of its 2022 revenues in the Americas, and 30 percent in Asia, excluding Japan.
LVMH’s shares have risen 23 percent since the start of the year, outperforming a 14.5 percent rise in the French blue-chip index and giving the luxury goods group a market capitalisation of €420 billion — double its level three years ago — cementing its lead as Europe’s most valuable company.
By Mimosa Spencer and Silvia Aloisi, Editor Sharon Singleton
Learn more:
LVMH Chairman Remains ‘Quite Confident’ Despite Slowing Growth
The world’s biggest luxury conglomerate is counting on China’s reopening to boost sales after quarterly growth slowed to a single-digit rate for the first time since 2020.
The LVMH watchmaker has ‘reached milestones in brand transformation,’ said chief executive Frédéric Arnault in an exclusive interview with BoF, though estimated revenues remain 20 percent below pre-pandemic levels.
Creative director Giovanna Engelbert has rolled out a colourful, more exuberant aesthetic and enlisted fashion heavy-hitters like Steven Meisel and Pat McGrath as the Austrian crystal-maker seeks to return to profitability by boosting its presence in fine jewellery.
Join us for a special Masterclass, as BoF’s luxury editor Robert Williams, along with a panel of experts, unpack our latest case study Inside Hermès’ Best-in-Class Leather Goods Strategy.
The Cannes film festival is no stranger to high fashion. Entrance-making gowns and jewels are almost mandatory, particularly after the luxury jeweller Chopard redesigned the festival’s highest prize, the Palme d’Or, in 1998.