Following yesterday’s release of LVMH’s figures for the 12 months ending 31 December 2023; Alice Price, associate apparel analyst at GlobalData, a leading data and analytics company, offers her view: “After experiencing a marked slowdown in Q3, LVMH has begun to see a promising improvement, with its year-on-year revenue growth in Q4 rising by 4.4ppts on the prior quarter to 5.5%. While this uplift is partly due to more favorable exchange rates, with the group’s organic sales growth only increasing from 9% in Q3 to 10% in Q4, 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. During the full year, LVMH’s group revenue rose by 8.8% to reach €86.2bn, despite being up against strong comparatives in the prior year, while its profit from recurring operations rose by 8.3% to €22.8bn. This allows LVMH to remain confident in its FY2024 outlook, with continued innovation and investments enabling it to propel growth.
“Japan represented the conglomerate’s strongest performing region in FY2023, recording organic revenue growth of 28%, followed by the rest of Asia, which rose by 18%, driven by their growing economies and heightened appetite for high end goods since the removal of lockdown restrictions at the end of 2022. Europe grew by 13%, supported by the resurgence of international travel, but slowed significantly throughout the year to just 5% in Q4, as inflationary challenges impacted domestic demand. The US was the most subdued region, with sales increasing by just 4%, as consumer confidence remains low and aspirational shoppers reign in discretionary spend. However, US revenue rose by 8% in Q4 versus 2% in the prior quarter, indicating hope for its performance in the year ahead.
“LVMH’s Selective Retailing division, which includes Sephora and DFS airport stores, remains its star performer, with reported revenue rising by 20.4% throughout the year. Sephora witnessed strong demand in North America, the Middle East, and Europe, with the latter driven by the opening of its first two stores in London and the renovation of its iconic Champs-Élysée flagship in Paris in 2023. The group’s Fashion and Leather Goods division grew by 9.1%, with Louis Vuitton having a particularly good year due to its innovative products and popular new designs. Its appointment of fashion and cultural icon Pharrell Williams also helped it drive sales by allowing it to resonate with the lucrative Gen Z demographic. Wines and Spirits represented the conglomerate’s worst performing division, declining by 7.0%, as it experiences a normalization of demand post-pandemic and suffers weaker demand in the US.”
