LVMH-Moet Hennessy Louis Vuitton (LVMHF) reported a 23% year-on-year increase in FY22 sales to €79.2 billion. Organic revenue in Fashion & Leather Goods increased by 20%, with Louis Vuitton, Christian Dior, Celine, Fendi, Loro Piana, Tag Heuer, Loewe, and Marc Jacobs increasing their global market share.
LVMH, the world’s largest luxury group, increased its annual dividend by 20% after reporting a second consecutive year of record sales by its main brands Louis Vuitton and Dior. LVMH’s owner, Bernard Arnault, said in a statement on Thursday that the company was “going into this year with confidence,” and that he believed LVMH could continue to grow as it did in 2022.
LVMH, which owns Louis Vuitton, Dior, Sephora, and Tiffany & Co., recently announced a major management reshuffle in which the tycoon’s eldest child, Delphine Arnault, will take over as Dior CEO. She attended the event with her brothers Antoine, Alexandre, Frédéric, and Jean, all of whom work for the family-owned conglomerate.
Arnault stated that it was critical to shake up the leadership in order to stay agile. “In a large company, as in any human organization, evolution is required. “I believe it is extremely harmful to maintain a form of organization that leads to a spirit of routine,” he explained.
LVMH’s perfumes and cosmetics unit increased sales by 5%, down from 10% in the previous quarter, while wines and spirits increased revenues by 4%, compared to 14% in the third quarter. Turnover in the selective retail division increased by 12%.
LVMH, a strong social economic footprint in France and around the world:
- 39,000 young people recruited worldwide in 2022.
- In France, LVMH recruited more than 15,000 people in 2022, which makes the Group the leading private recruiter in the country.
- In 2022, LVMH invested nearly 215 million euros in training its employees.
- In France, one job created directly by LVMH generates four for the French economy. That is equivalent to around 160,000 people working indirectly for the Group.
- More than 500 stores and 110 manufacturing facilities and workshops located across France.
- LVMH opens several manufacturing facilities each year in France, notably for Louis Vuitton.
- Five billion in corporation taxes paid worldwide, almost half of which in France.
- More than one billion euros invested in France each year.
- On average over recent years, the total fiscal footprint (corporation tax + VAT + social charges) of LVMH in France is more than 4.5 billion euros per year.
- The salaries of the group’s employees are among the most competitive in their sector of activity.
- Most of our employees in France benefit from profit-sharing, with an overall total for the group of 400 million euros in 2022.
- LVMH has been recognized for its leadership in terms of transparency and performance in matters concerning the protection of the climate, forests and water by the CDP (Carbon Disclosure Project), a global not-for-profit environmental organization and is now one of 12 companies in the world to have obtained a triple “A” rating out of more than 15,000 rated companies.
LVMH Chief Financial Officer Jean-Jacques Guiony cautioned that while the rebound has been strong in January, “we’re not back to the levels of 2019. We’re still a long way from there.”
The luxury goods group’s shares have reached new highs this month, giving it a market capitalization of 400 billion euros for the first time and cementing its position as Europe’s most valuable company.
Watches & Jewelry: rapid growth in jewelry and watches
The Watches & Jewelry business group recorded revenue growth of 18% in 2022 (12% on an organic basis). Profit from recurring operations was up 20%. Tiffany & Co. had a record year, driven by its increasing desirability. While its High Jewelry revenue doubled, the new Lock bracelet collection, rolled out in North America, enjoyed great success alongside other iconic lines. The “Vision & Virtuosity” exhibition at the Saatchi Gallery in London showcased 185 years of creativity and know-how of the Maison over the summer. Bvlgari confirmed its strong momentum, particularly in Europe, Japan and the United States. The iconic Serpenti line and the High Jewelry and High Watchmaking collections were the main growth drivers. The Octo Finissimo Ultra watch broke a new record of thinness. Chaumet had a good year and celebrated nature with its “Végétal” exhibition in Paris. Fred showed strong growth and launched its first retrospective exhibition at the Palais de Tokyo in Paris. In the watchmaking sector, TAG Heuer unveiled, among other innovations, the Carrera Plasma, an avant-garde fusion of watchmaking and lab grown diamonds. As official timekeeper, Hublot enjoyed strong visibility during the 2022 Football World Cup. Zenith continued to expand its in-store and online distribution.
Analysts predict that after three years of COVID disruptions, the industry will benefit from a strong return of Chinese shoppers, who were the main source of profits for luxury companies prior to the pandemic.
Confidence in 2023
With the month of January having started well and despite an uncertain geopolitical and economic environment, LVMH is confident in its ability to continue the growth observed in 2022. The Group will pursue its brand development focused strategy, underpinned by continued innovation and investment as well as a constant quest for desirability and quality in its products and their distribution.
Driven by the agility of its teams, their entrepreneurial spirit and its well diversified presence across businesses and geographic areas in which its customers are located, LVMH enters 2023 with confidence and once again, sets an objective of reinforcing its global leadership position in luxury goods.
In the current consumer environment, LVMH will be an outperformer. This, combined with its massive size, should allow it to maintain a strong position regardless of where the economy is headed, making LVMH a Strong Buy.
Company Description
LVMH Moët Hennessy — Louis Vuitton, Société Européenne operates as a luxury products company. The company offers champagnes, wines, and spirits under the Ao Yun, Ardbeg, Belvedere, Bodega Numanthia, Cape Mentelle, Chandon, Château Cheval Blanc, Château d’Yquem, Cheval des Andes, Clos des Lambrays, Clos19, Cloudy Bay, Dom Pérignon, Glenmorangie, Hennessy, Krug, Mercier, Moët & Chandon, Newton, Vineyard, Ruinart, Terrazas de los Andes, Veuve Clicquot, Volcan de mi Tierra, and Woodinville brands. It also provides fashion and leather products under the Berluti, Celine, Christian Dior, Emilio Pucci, Fendi, Givenchy, Kenzo, Loewe, Loro Piana, Louis Vuitton, Marc Jacobs, Moynat, Nicholas Kirkwood, Pink Shirtmaker, and Rimowa brands. In addition, the company offers perfumes and cosmetics under the Acqua di Parma, Benefit Cosmetics, Fenty Beauty by Rihanna, Fresh, Parfums Givenchy, Guerlain, Kat Von D Beauty, Kenzo Parfums, Maison Francis Kurkdjian, Make Up For Ever, Marc Jacobs Beauty, Parfums Christian Dior, and Perfumes Loewe brands; watches and jewelry under the Bvlgari, Chaumet, Fred, Hublot, TAG Heuerand Zenith brands; and custom-designed yachts under the Feadship brand name, as well as designs and builds luxury yachts under the Royal Van Lent brand. Further, it provides daily newspapers under the Les à ‰chos brand; Belmond, a luxury tourism service; home other activities under the Belmond, Cheval Blanc, Connaissance des Arts, Cova, Investir, Jardin d’Acclimatation, La Samaritaine, Le Parisien, and Radio Classique brands; and selective retailing products under the DFS, La Grande Epicerie de Paris, Le Bon Marché Rive Gauche, Sephora, and Starboard Cruise brands, as well as operates Jardin d’Acclimatation, a leisure and amusement park. The company operates 4,915 stores worldwide. LVMH Moët Hennessy — Louis Vuitton, Société Européenne was incorporated in 1923 and is headquartered in Paris, France.
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