LVMH ‘Cautiously Confident’ For 2021
Revenue trends improved in the fourth quarter, fuelled by an 18 per cent organic sales rise in fashion and leather goods.
LVMH Moët Hennessy Louis Vuitton said it was “cautiously confident” for 2021 after-sales trends continued to improve in the fourth quarter, fuelled by the strong performance of its key fashion and leather goods division.
The segment saw revenues increase 18 per cent on a like-for-like basis during the period. Organic sales at its star brands, Louis Vuitton and Dior, grew in the double-digits in the last two quarters, and profitability at Vuitton remains “exceptional,” the luxury conglomerate reported on Tuesday.
Group sales were down 3 per cent in organic terms in the three months to Dec. 31, versus a fall of 7 per cent in the third quarter, and a rise of 8 per cent during the same period last year, just before the coronavirus pandemic halted travel and forced thousands of stores to close.
While Asia saw double-digit growth in the second half, the U.S. and Japan are gradually recovering, but Europe continues to struggle, LVMH said in a statement published after the market close.
After posting several consecutive years of record results, it saw net profit fall 34 per cent in 2020 to 4.7 billion euros, while profit from recurring operations was down 28 per cent to 8.3 billion euros. Sales were down 17 per cent in 2020 to 44.6 billion euros, underscoring luxury’s relative resilience, helped by a sharp increase in online sales.
Excluding fashion and leather goods, all other categories saw revenues decline in the fourth quarter.
Wines and spirits fell 11 per cent; perfumes and cosmetics were down 15 per cent, and watches and jewellery lost 2 per cent. Selective distribution — which includes Sephora and DFS, LVMH’s travel-retail business — saw revenues dive 26 per cent as international travel showed no sign of recovery.
Earlier this month, LVMH completed its acquisition of U.S. jeweller Tiffany & Co., strengthening its foothold in the lucrative fine jewellery market.
This article was originally published on WWD.
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