LVMH’s First-Quarter Sales Were Driven By Dior And Louis Vuitton

Demand for Louis Vuitton and Dior products bolstered its first-quarter sales at LVMH, the world’s largest luxury goods group, demonstrating the industry’s resilience in the face of geopolitical tensions, Covid-19 lockdowns in China, and unpredictable financial markets.

According to RBC’s average forecasts, high-end fashion brands contributed a 30 percent increase in sales of its largest segment, fashion and leather products, on a like-for-like basis, exceeding analyst projections of 17 per cent.

“The year starts on a high note,” said Luca Solca of Bernstein, citing “another material beat” of consensus expectations, particularly the fashion and leather goods activity.

In a conference call with analysts, LVMH Chief Financial Officer Jean-Jacques Guiony said that Dior and Celine increased faster than other labels, while Louis Vuitton “is never very far from the average for the division.”

According to the executive, the group will continue to boost prices at its fashion labels – but in a reasonable manner – to reflect the cost of doing business.

According to current HSBC estimates, luxury industry prices have risen by roughly 8 per cent in the previous six months since September last year, with hikes ranging from 20 per cent to 23 per cent at Louis Vuitton and Tiffany.

Watches and jewellery brands did well as well, with sales of high-end items up 19 per cent, driven by Tiffany, especially in the United States.

With marketing campaigns starring K-pop sensation Rose wearing heavy gold jewellery, the American luxury brand is undergoing a revitalization drive led by its new French owner, aimed at younger consumers.

Sephora stores in the United States and France saw increased foot traffic, resulting in a 24 per cent increase in organic sales for the selective retail sector. However, the luxury retailer’s DFS travel retail division continued to be hampered by travel restrictions in Asia, particularly in Hong Kong, where visitors have yet to return.

DFS’s turnaround efforts, according to Guiony, could help it break even this year.

Although he cautioned that, in addition to the lockdowns in Shanghai and Shenzhen, traffic is down in cities that are not affected by such measures, with people travelling less, the executive sought to reassure investors concerned about disruptions in China due to restrictions aimed at preventing the spread of coronavirus.

“Obviously this is an impact – it’s a fairly recent impact so you don’t see it in the numbers,” he said. He pointed out that the effects witnessed so far in April are similar to those experienced in the second part of March. Based on previous Chinese lockdowns, the executive projected that once the limitations were lifted, demand would immediately recover.

“It is probably worth looking beyond 2Q China disruption,” said Citi, which plans to retain a buy rating on shares.Overall sales at LVMH rose by 23% on a like-for-like basis, which strips out the effect of currency changes, in the three months to March to 18 billion euros, beating a consensus estimate for 18% growth, cited by Jefferies.

On April 14, Hermes will disclose first-quarter sales, while Kering will report on April 21.

(Adapted from


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