LVMH Moet Hennessy Louis Vuitton, the parent company of luxury brands such as Louis Vuitton, Dior, and Celine, has reported sales of €86.15 billion ($93.79 billion) for 2023, surpassing analysts' expectations. The company experienced a 13% organic sales growth compared to the previous year, driven primarily by its fashion and leather-goods division. Although this growth is slightly lower than the 17% reported between 2021 and 2022, LVMH remains optimistic about its prospects for the new year.
The luxury goods industry has faced challenges in recent years, grappling with slowing sales globally and the impact of China's economic downturn. China, once the world's largest luxury market, has been particularly affected by a lengthy property sector downturn, weak exports, and subdued consumer demand.
Bernard Arnault, chairman and CEO of LVMH, expressed confidence in the company's future. He highlighted the strength of their coveted brands and agile teams as key factors underpinning their positive outlook for 2024.
The fashion and leather-goods division recorded €42.17 billion in revenue, representing a 14% organic sales growth. Selective retailing, which includes popular brand Sephora, saw a significant 25% increase in revenue amounting to €17.89 billion. However, the watches and jewelry as well as perfumes and cosmetics divisions experienced more modest growth of 7% and 11%, respectively.
The wines and spirits division was the only business unit that reported lower sales, with a 4% decline attributed to high comparison basis in 2022 and elevated levels of inventory.
Overall, LVMH achieved a net profit of €15.17 billion in 2023, up from €14.08 billion the previous year. The company plans to propose a dividend of €13 per share at its upcoming shareholders' meeting on April 18, compared to the €12 per share paid out in the previous year.
Analysts, according to FactSet, had estimated annual sales of €85.74 billion and a profit of €15.68 billion.
Despite geopolitical and macroeconomic uncertainties, LVMH remains confident in its ability to continue growing and gain market share throughout the year.
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