Stellar growth in the first quarter of 2021 has propelled luxury conglomerate LVMH to an impressive start despite ongoing lockdown measures across Europe due to the COVID-19 pandemic. The company experienced a return to growth in overall revenues, driven by surging sales at its iconic brands Louis Vuitton and Dior.
During the three months leading up to March, LVMH reported a 30% rise in like-for-like sales, reaching a total of 14 billion euros ($16.70 billion). This exceeded analysts’ expectations, as they had forecasted a growth rate of 17%. Additionally, these sales figures demonstrated an 8% increase compared to pre-pandemic levels in the first quarter of 2019.
Last year, LVMH encountered a significant decline in revenues, experiencing a 16% decrease as a result of store closures and the worldwide decline in international tourism brought on by the pandemic. However, with the rise in online shopping and the reopening of stores in key markets such as China, the luxury sector has witnessed a strong recovery.
The fashion and leather goods division, which accounts for nearly half of LVMH’s revenues, experienced an exceptional 52% increase in like-for-like sales. This far surpassed analysts’ predictions of a 27% rise. The watches and jewelry division also saw positive growth, with sales increasing by 138% when factoring in acquisitions and exchange rate effects. This growth can be attributed to the successful acquisition of renowned jewelry brand Tiffany for $15.8 billion, completed by LVMH in early January after navigating a challenging legal battle.
The successful performance of LVMH in the first quarter of 2021 demonstrates the resilience and adaptability of the luxury industry amidst the challenges imposed by the pandemic. The consistent demand for luxury fashion and accessories, particularly in online markets and regions where stores have reopened, has played a crucial role in driving the industry’s recovery. As vaccination efforts continue to progress globally and economies gradually recover, it is expected that the luxury sector will remain on an upward trajectory, ultimately fostering growth for LVMH and other key players in the industry.
Useful Links:
– CNBC: LVMH sales rise 30% in Q1, beating expectations
– Business of Fashion: How Louis Vuitton Beat the Pandemic
