© Reuters. A sign outside a Louis Vuitton luxury boutique operated by LVMH Moet Hennessy Louis SE in Paris, France, January 25, 2024. REUTERS/Benoit Tessier/ File Photo
By Mimosa Spencer
PARIS (Reuters) – Luxury goods group LVMH posted a 10% rise in fourth-quarter sales as growth increased from the previous quarter, driven by resilient demand – including in China – for its luxury brands. high-end fashion during the important finale. period of the year.
Sales of the world's largest luxury group, owner of brands such as Louis Vuitton, Dior and Tiffany, reached almost 24 billion euros ($26 billion) in the last three months of the year, excluding currency fluctuations and acquisitions.
This was just above analyst expectations for 9% growth, according to a consensus cited by HSBC. Sales had grown 9% in the third quarter and 17% in both the first and second quarters.
Makers of the most expensive luxury goods, such as LVMH and Richemont, which owns Cartier, have shown the most resistance to a drop in consumer spending. Rivals selling products at lower prices, such as Britain's Burberry, have struggled.
“High-end products are the ones in greatest demand in the world,” LVMH CEO Bernard Arnault told analysts, citing haute couture products from brands such as Christian Dior and adding that he was happy with the rate of group growth.
LVMH products include a small Lady Dior bag, which sells online for $11,500, and Dom Perignon P3 Plenitude Brut Rose champagne, which sells for $5,377.
Arnault said he was “very confident” in 2024.
Business at Louis Vuitton from high-end Chinese spenders in Europe reached 70% of the level generated in 2019, before the COVID-19 pandemic, Chief Financial Officer Jean-Jacques Guiony told reporters.
“We have significant growth in Chinese customers that continues unabated,” he told reporters.
“It has gone well, we generated a good level of activity with bases of comparison that were not so simple last year, especially in December, with a very good level of activity, so in terms of demand we are quite happy,” he stated. talking about the overall results of the group.
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After a post-pandemic splurge that fueled stellar sales growth for high-end fashion companies for two years, consumers have been holding back on purchases, particularly younger, less wealthy clientele who are more vulnerable to rising inflation. inflation.
LVMH, a conglomerate that encompasses spirits, jewelry, cosmetics and fashion, is considered a benchmark for the luxury industry in general.
“The results look solid at first glance, even on the earnings line, a slight advance of consensus expectations both at the margin and at the absolute level,” Bernstein analysts said.
Barclays analysts project industry-wide growth for high-end luxury companies of 5% this year, up from 9% last year and double-digit growth in the previous two years.
Spending by Americans and Europeans remains subdued, analysts say, and has only been partially offset by the return of Chinese tourists after lockdowns.
Sales at LVMH's fashion and leather goods division, which includes its biggest brands Vuitton and Dior, rose 9% during the quarter, just below expectations for 10% growth.
The group proposed a dividend of 13 euros per share, compared to 12 euros a year ago. It forecast continued growth next year despite an uncertain macroeconomic and geopolitical context.
“The current quarter is expected to benefit from a strong Chinese recovery and a consumer group,” said Jelena Sokolova, senior consumer discretionary and luxury analyst at Morningstar. “We continue to see Chinese demand globally as a global bright spot for luxury.”
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