Dive Brief:
- LVMH’s revenue rose 17% to roughly $23.2 billion (21 billion euros) in the first quarter of fiscal 2023 compared to the prior year, driven partly by strong gains across its fashion, jewelry and watch portfolios.
- Fashion and leather goods revenue increased to $11.9 billion, up 18% year over year. Watches and jewelry revenue also saw double-digit growth, rising 11% from the previous year to $2.9 billion.
- Although the luxury conglomerate’s revenue soared in Asia as coronavirus restrictions eased, some signs during the company’s earnings presentation this week pointed to a potential slowdown in the U.S.
Dive Insight:
The scale of LVMH — whose broad brand portfolio includes Louis Vuitton and Christian Dior, as well as jeweler Tiffany & Co. — provides a glimpse into how the broader luxury market may be performing. LVMH’s revenue soared in Japan, rising 34% year over year in fiscal 2023’s first quarter. Excluding Japan, Asia also saw double-digit growth, with a 14% revenue increase.
Meanwhile, revenue in the U.S. rose 8%. Much of the growth was driven by LVMH’s beauty retailer Sephora, according to the company’s chief financial officer, Jean-Jacques Guiony. He said demand across the rest of the business was slowing in the country, including for fashion, leather goods and jewelry.
“Maybe interest rate rises are taking their toll on spending,” Guiony told analysts during a video conference to discuss the company’s earnings.
The U.S. market accounted for 23% of the company’s overall revenue, down slightly from 24% during the same period last year. Nearly half of the company’s revenue, 43%, came from Asia, with a whopping 7% derived solely from Japan.
The company chalked part of the growth up to coronavirus restrictions lifting in Asia earlier this year.
“We registered some pretty nice pick-up in China, which bodes well for the rest of the year,” Guiony said. “We’re really back to where we were prior to the complicated period of 2022.”
The first-quarter results lifted LVMH’s share price to a record high, vaulting it into the top 10 companies worldwide based on market value, Bloomberg reported. The company credited some of the gains to recent designer appointments and new product releases.
That included Louis Vuitton naming musician and fashion designer Pharrell Williams as its men’s creative director, with his first show debuting in June. Executives also pointed to the brand’s new collaboration with Japanese artist Yayoi Kusama, who is known for her affinity for polka dots, to create a collection including leather goods and accessories.
In its jewelry segment, LVMH executives highlighted Tiffany’s global rollout of its Lock collection, the company’s first gender-neutral product line.
One of the items, a tight-fitting bangle with a swivel closure meant to resemble a padlock, is widely seen as an answer to rival Cartier’s Love Bracelet. Like the Lock Bangle, Cartier’s bracelet has a nontraditional closure, which requires a screwdriver to take off the jewelry.
