LVMH

In Q1, LVMH, the world’s largest luxury company, saw a significant 17% y/y increase in sales, reaching €21bn. This exceeded analysts’ expectations, which were more than double the actual reported sales. The sales surge was mainly due to the reopening of stores in China following COVID-19 lockdowns, resulting in a 14% y/y increase in sales in Asia (excluding Japan).
Although Asia was the largest contributor to overall sales (36%), Japan and Europe reported the highest growth levels of 34% and 24% respectively. The US, the second-largest region, recorded an 8% increase in sales growth, accounting for 23% of total sales.
In terms of business groups, the Fashion & Leather Goods division was the standout performer, with a remarkable 18% increase in revenues, totaling €10.7bn. The division was led by Louis Vuitton and Christian Dior’s exceptional results. The Perfumes & Cosmetics division reported a 10% increase, largely boosted by Christian Dior fragrances. The Watches & Jewellery business also reported an 11% growth rate, with US luxury retailer Tiffany & Co. starting the year off on a high note.
During the Q&A session, LVMH management expressed optimism for the rest of the year, despite the challenging macro environment. They attributed this mainly to the full normalisation of China’s spending patterns following the lockdowns. LVMH is held in both the Cratos BCI Worldwide Flexible Fund as well Global Managed portfolios.By Desmond Esakov