LVMH, the world’s largest luxury company, has reported a significant rebound in sales within China, while the United States has experienced a slowdown, according to its first-quarter report. The French company, known for iconic fashion houses such as Louis Vuitton and Dior, as well as prestigious brands including Hennessy cognac and Tiffany jewelry, achieved sales of 21.04 billion euros ($23.10 billion) in the three months ending in March. This represents a 17% organic growth, surpassing analysts’ expectations of an 8% increase.
These figures from LVMH offer valuable insights into the recovery of the Chinese market following the impact of Covid-19 lockdowns on sales in 2022. Sales in Asia, excluding Japan, witnessed a 14% growth in the first quarter, in contrast to an 8% decline in the previous quarter of last year. LVMH expects China to continue driving growth in 2023. However, the situation is more varied in the United States, with indications of weakening demand, particularly among younger, lower-spending consumers. US sales grew by 8% in the quarter, mainly attributed to the Sephora beauty store chain, which is known for being less exclusive compared to LVMH’s luxury brands.
Jean-Jacques Guiony, LVMH’s finance chief, commented on the sluggish demand for fashion, leather goods, and jewelry in the US market. The Americas accounted for 27% of the company’s total revenues in 2022, while Asia, excluding Japan, contributed 30%. Despite these challenges, LVMH’s shares have experienced a 23% increase since the beginning of the year, surpassing the French blue-chip index. This has propelled the luxury goods group to become Europe’s most valuable company, with a market capitalization of 420 billion euros, double its value from three years ago. This demonstration of resilience amidst market turmoil and rising inflation underscores LVMH’s strength.
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