LVMH has 53.7 billion reasons to smile, as it further strengthens its leadership over the luxury market. The French conglomerate closed 2019 with 54 billion euro in revenue. A record that is equal to an outstanding growth of +15% at current rates and +10% at constant rates. The Fashion & Leather Goods division is pulling the wagon: +20%. The only disappointment? The fourth quarter was less brilliant than the previous ones.
The last quarter
During the last fiscal quarter (October – December 2019), LVMH’s sales reached 15.27 billion euro. This performance is equal to a +8% at constant rates, compared to the previous average +11% of the 9 prior months. Analysts’ forecasts and Reuters’ estimated indicate that the next growth period will do +9%. For 2020, the group has said itself to be “cautiously confident”, and has set the goal of strengthening its advantage within the luxury global market. All while “the geopolitical context remains uncertain”.
Let’s go back to the 2019 financial results. After looking at the stellar revenue result, we must say that LVMIH’s year ended with 11.5 billion euro in profit from recurring operations, +15% from the previous year. Net profits before minority interests were of 7.2 billion euro, +13%. At a geographic level, Asia (accounting for 30% of LVMH’s market share, excluding Japan) grew the most: +14%. The USA, on the other hand, was the worst performing area, growing only +6% (24% market share).
Fashion, accessories, leather
The Fashion & Leather Goods division grew by 20% at current rates, and by 17% at constant rates during 2019. Overall, this section contributes about 40% of total revenue to LVMH. And more: it generates about 2/3 of profits from recurring operations, which itself grew by 24% thanks to this division.
The exceptional growth of LV and Dior (among others)
LVMH underlined in the annual financial report, underlined the “exceptional growth” of the Louis Vuitton luxury brand (“which continues to have an outstanding profitability level”, and Christian Dior. Bvulgari also performed well. Loewe as well “strengthened its growth thanks to the push of the designer JW Anderson”, while “Berluti made good progress”.
As far as forecasts for 2020 go, LVMH expects that “all of the group’s fashion brands will continue to place their focus on the creativity of their collections”. All while giving value to “the charm of the products and developing further digital presence”