LVMH Outperforms Expectations, Buoying Luxury Sector Hopes
PARIS (Reuters) - Luxury conglomerate LVMH exceeded market expectations on Tuesday, reporting a 1% increase in fourth-quarter sales driven by strong demand for designer fashion and handbags.
The owner of brands such as Louis Vuitton and Bulgari announced sales of 23.9 billion euros ($24.95 billion) for the three months ending December 31st, surpassing a consensus forecast of a 1.6% decline.
LVMH's fashion and leather division nearly matched its performance from the previous year, while the retail unit experienced significant sales growth.
Jean Jacques Guiony, LVMH's finance chief, attributed the positive results to a "slight trend of improvement" in consumer sentiment across the United States and Europe towards the end of the year.
LVMH's fashion division, including its flagship brands Louis Vuitton and Dior, reported a 1% decline in fourth-quarter sales to 11.1 billion euros, exceeding analyst expectations of a 3.3% drop. This division accounts for the majority of LVMH's revenue and recurring profit.
As Europe's largest company by market capitalization, LVMH's performance serves as an encouraging sign for investors seeking evidence of an industry recovery. The luxury sector has faced its slowest sales growth in recent years, with Bain & Company estimating a 2% global decline in 2023 due to economic challenges in China.