Bernard Arnault did not express any concern about slowing growth at LVMH today, pointing out that its pricing power comes from product mix and pursuing a growth at all costs strategy reduces brand exclusivity.
After the close of markets in Paris today, LVMH reported 2023 revenue growth of 8.8% when compared with 2022, which was slightly ahead of the market consensus forecast of 8.5%. Organic growth of 13% was pulled down by a negative 4% currency effect owing to weakness in the Euro.
Though these numbers were in line with most forecasts, they tell a cautionary tale for 2024 as growth slowed markedly over the course of the year: Q1 revenue growth was 17%, Q2 17%, Q3 9%, Q4 10%. End of the year forecasts tend to be good leading indicators for the start of the next year (unless there are strong seasonal dimensions, which is not the case here) and these dynamics point to a slowdown for H1 2024.
The geographic composition of sales was mostly unchanged from last year despite the surge in demand from Chinese consumers in Q1: U.S. 25%, Europe 25%, Asia (x. Japan) 31%, Japan 7%, Others 12%.
Among product lines, the gainers, year-over-year, were Selective Retailing 20%, Fashion & Leather Goods 9%, and Watches & Jewelry 3%. Wine & Spirits again lagged and was down 7 percent. This is a breakdown of product lines as a percentage of total 2023 revenues: Selective Retailing 7.6%, F&L 49%, W&J 13%, W&S 7.6%.
Like the rest of the world, LVMH was hit by the effects of the higher global interest rate environment. The cost of net financial net rose from 17 million euros to 367.
LVMH’s share price ($LVMHF) surged by over 500 basis points today while the FSW High Frequency Luxury Monitor all-luxury index closed up 287 basis points.
You can find the presentation materials and a replay of the investors’ call on the LVMH website: https://lnkd.in/efkeVz5n