“Hello Google. How much is 79.2 billion euros of turnover in dollars? » At the opening of the LVMH annual results press conference on Thursday, January 26, in Paris, the computer of Robert Williams, journalist for The Business of Fashionan American publication devoted to the fashion sector, echoed the astonishment of Anglo-Saxon financial analysts when reading the results of the world’s number one luxury goods company.
“Once again, these are record results”, argued Bernard Arnault, its CEO. Thanks to a jump in activity of 23%, the group, which notably owns the brands Louis Vuitton, Dior, Tiffany and Dom Perignon, is now flirting with the bar of 80 billion euros in activity. Its operating margin reached 26.6%. Its net income exceeds 14 billion euros. “We are regaining market share. It had not been seen since 2019 “observes Mr. Arnault, whose group is now the first market capitalization in Europe, ahead of Shell, after crossing the 400 billion euro mark in mid-January.
LVMH notably benefited from the results of its fashion labels. For the first time, Louis Vuitton achieved more than “20 billion euros” in turnover, while Celine, thanks to the creations of Hedi Slimane, exceeded the “two billion euros in sales”, welcomed the leader. The performance of New York jeweler Tiffany, which LVMH is relaunching since its acquisition for the record amount of $15.8 billion in 2021, are also “remarkable”, underlines the CEO. Its operating profit reached “more than a billion euros”. So much so that Mr. Arnault swears that Tiffany would be worth “on the stock market more than twice what it was worth” when it was acquired.
Bernard Arnault “quite confident” for 2023
How will the 2023 financial year unfold? This is the question that plagues financial analysts. Because the growth forecasts for the luxury market, estimated at 353 billion euros in 2022, are in a so-called low range with regard to the usual performances: the firm Bain & Company is counting on “+3% to +8%” this year, compared to +21% last year. Macroeconomic uncertainties prompt HSBC bank analysts to ” prudence “.
But Mr. Arnault is “fairly confident”. He wants to believe in the revival of Chinese spending, at home, in Europe and Asia. That is to say those who, in 2019, before the start of the pandemic due to the coronavirus, ensured a third of the sales of luxury goods. The return of tourists will probably be “starting this summer”, predicts Mr. Arnault. Tens of thousands of tourists from Hong Kong and mainland China have already swept into Macao’s casinos in January to celebrate the Chinese New Year. “Si the start of the year is confirmed,” 2023 should “to be a very good year”believes Bernard Arnault.
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