© Reuters. The LVMH logo is seen before a news conference to present the 2022 annual results of LVMH Moet Hennessy Louis Vuitton in Paris, France, January 26, 2023. REUTERS/Gonzalo Fuentes
PARIS (Reuters) – LVMH shares, which hit an all-time high earlier this month, fell on Friday as some analysts expressed disappointment over the company’s margins, taking some of the luster off a quarterly sales rise. trimester.
The French luxury goods group reported Thursday night that its sales rose 9% in the fourth quarter as shoppers in Europe and the United States splurged during the crucial holiday season, helping to partly offset disruptions. of COVID-19 in China.
However, some analysts focused on its flat margins.
“The small wrinkle is at the margin, where the group delivered a flat year-over-year operating margin (versus consensus of +90 bps), largely a reflection of maintaining/increasing H2 marketing spend despite growth revenue disruption,” Credit Suisse analysts. wrote in a note.
LVMH’s chief financial officer, Jean Jacques Guiony, said on Thursday that he had decided to keep marketing investments in the second half, at a level 30% higher than a year earlier despite lower revenue growth, but did not expect a such a steep drop in business in China. in December.
Guiony also said that LVMH’s strategy of parallel channels for its perfume and cosmetics division was “an expensive decision” that reduced profitability, but that it was “the right decision” and will protect the attractiveness of its labels.
The division’s profit from recurring operations stood at 660 million euros in the year, a 3% drop.
