In its recently announced 2022 financial results, LVMH, the world’s leading luxury company, has reported historic growth. The firm’s sales reached a staggering 79.2 billion euros, marking a significant 23% increase compared to the previous year. This growth can be attributed to the strong performance of its Fashion and Leather Goods segment. Additionally, LVMH achieved an impressive operating income of 21.1 billion euros.
Notably, just days after becoming the first European company to surpass a market capitalization of 400 billion euros on the Paris stock exchange, LVMH proudly unveiled its record-breaking results for the year. CEO Bernard Arnault expressed his satisfaction, stating, “The performance in 2022 illustrates the exceptional appeal of our houses and their ability to create desire during a challenging year in terms of economics and geopolitics.”
As a company that owns 75 luxury brands, LVMH ended the year with 79.2 billion euros in revenues and an operating income of 21.1 billion euros. These figures represent a remarkable growth of 23%, resulting in a net profit of 14.1 billion euros, an increase of 17% compared to 2021. Furthermore, LVMH’s operating cash flow surpassed an impressive 10 billion euros.
The driving force behind LVMH’s growth lies within its flagship fashion and leather goods houses. According to published data, the Fashion and Leather Goods department experienced the highest growth, recording a remarkable 25% increase. This segment alone generated sales of 38.6 billion euros, thanks to the enduring popularity of its iconic brands. The exemplary performance of Louis Vuitton, ranked the 14th most valuable brand in 2022 according to Interbrand, has enabled the brand to diversify its activities, with successful ventures such as LV Dream and the highly anticipated hotel project in the heart of Paris. Dior, which reopened its flagship store on Avenue Montaigne at the beginning of last year, continues to witness growth across all product lines, benefiting from the expertise of its new CEO, Delphine Arnault. Other notable brands that have contributed to LVMH’s growth include Celine, Loewe, Fendi, and Loro Piana.
The Watches and Jewelry segment also experienced substantial growth, with sales increasing by 18% to reach 10.6 billion euros. It is noteworthy that Tiffany & Co., which was recently acquired by the LVMH group, had an exceptional year, surpassing previous records.
The Perfumes and Cosmetics division achieved a solid 17% growth, generating 7.7 billion euros in revenue, primarily driven by the strong momentum in fragrances.
The Wines and Spirits segment witnessed a notable double-digit growth of 19% to reach 7 billion euros. LVMH specifically highlighted the “particularly strong attractiveness in Europe, Japan, and emerging markets” as contributing factors.
Lastly, LVMH’s Selective Retailing division experienced a significant boost, achieving a remarkable 26% increase in sales, totaling 14.8 billion euros. Despite store closures in Russia, Sephora had another record-breaking year, while DFS, the travel retail specialist, was affected by the global health situation, particularly in China. Le Bon Marché continued to thrive, benefiting from the patronage of French customers and the return of international tourists.
Throughout the year, LVMH placed great emphasis on investments in recruitment and craftsmanship, both on a global and national level. In 2022 alone, the company hired 39,000 young professionals worldwide and strengthened its teams in France by adding over 15,000 talented individuals. Furthermore, LVMH plans to kick off its You and Me tour across France in February as part of its Excellence in Craftsmanship program, aiming to recruit an additional 3,000 individuals by the end of 2023.
Useful links:
1. LVMH Yearly and Half-Year Reports
2. Interbrand Ranking: Best Global Brands 2022
