LVMH, the leading luxury conglomerate, has reported impressive sales growth of 23% on an organic basis (29% reported) compared to the same period last year, reaching a total of 18 billion euros. This growth has been largely driven by the Fashion and Leather Goods category, which has seen double-digit growth across all business segments, except for Wines and Spirits. Despite challenges such as the armed conflict in Ukraine and the ongoing impact of the Covid-19 crisis, LVMH has managed to maintain strong performance following a record-breaking year in 2021.
One of the key contributors to LVMH’s growth is the Fashion & Leather Goods sector, which has experienced an estimated organic sales growth of 30% for the quarter. This growth can be attributed to various factors, including the reopening of Christian Dior’s Paris headquarters and the exceptional performance of the Celine brand. The Montres & Joaillerie segment has also performed well, with a notable 19% increase in sales during this period. Similarly, the Perfumes & Cosmetics division has seen a 17% increase, driven by the successful launch of several new fragrances.
However, the Wines & Spirits segment has faced slower sales growth, with a modest increase of 2%. This can be partly attributed to a decrease in volumes of Hennessy cognac, which has been affected by supply and logistical constraints.
On the other hand, the Selective Retailing segment has witnessed a robust growth of 24% in sales. The reopening of stores compared to the same period last year has contributed to this growth, although the segment continues to face challenges in the travel retail sector.
In terms of geographical performance, Europe and the United States have shown strong growth, while Asia has experienced a slowdown. Europe witnessed an impressive 45% surge in sales in the first quarter, a significant improvement compared to the decline recorded last year due to the pandemic. The United States also saw double-digit growth, with a 26% increase in sales. However, the Asian market, excluding Japan, has seen more moderate growth of 8% this year, partly due to recent health restrictions in China. Asia, excluding Japan, represented 41% of LVMH’s total sales in the first quarter of 2021, but now accounts for 37% of sales. The United States holds a 24% share of sales, followed by Europe excluding France at 14%.
Overall, LVMH’s impressive sales growth in the first quarter reflects the strength and resilience of the luxury market. Despite the challenges posed by the global crisis and geopolitical tensions, the company’s diverse portfolio of brands and strategic initiatives have enabled it to continue thriving in a highly competitive industry.
Useful links:
1. For more information on LVMH’s financial performance: LVMH Q1 2022 Revenue
2. For insights into the luxury industry’s recovery post-pandemic: Luxury’s Post-Pandemic Recovery in Three Scenarios
