Luxury in the spotlight as LVMH reports 2023 financial results

Luxury group LVMH (LVMHF, fully known as LVMH Moet Hennessy Louis Vuitton SE) on January 12th reported its Q4 and full-year 2023 results, after Paris markets closed.

The group reported €86.2 billion in revenue for 2023 as a whole, up nine percent, while profit from recurring operations was up eight percent. The FY revenues for 2022, in comparison, netted 13 percent less at €79.18 billion.

The LVMH profits from recurring operations were reported as €22.8 billion, up eight percent YoY. Meanwhile, the company's operating cash flow was €8.1 billion, and operating margin was at a healthy 26.5 percent.

Earnings per share, at €13.00, were up from 2022's collective €12.00 EPS.

Meeting expectations

This was generally in line with expectations. Ahead of the announcement, analysts and market experts expected the group to report profits of around €23 billion, up by roughly six percent per year, and EPS to be up 5.3 percent YoY.

However, it should be noted that LVMH's operating free cash flow suffered in 2023, down more than €2000 from 2022. For the full year of 2023 it was reported as €8104, as opposed to 2022's €10,113.

A tough year to pull off

Luxury spending had been notoriously subdued throughout most of 2023, and it was under this backdrop that LVMH tonight reported their financial results for the full year and Q4. So, the presentation was closely watched as a bellwether stock for luxury goods, as the 2023 year saw the affluent luxuries market remain depressed throughout most of the year as consumers worldwide struggled with high interest rates and inflation.

The LVMH were generally below expectations, after the reasonably successful previous quarters of 2023.

In July 2023, LVMH reported that profit from recurring operations for the first half of 2023 was up 13 percent at €11 574 million. In October, it announced that it had recorded organic revenue growth of 14 percent during the first nine months of 2023 compared with the same period in 2022. 

Read our analyst's insights: why I'm buying LVMH stocks

An end to an eventful year

The 2023 year was a significant one for LVMH. As though a real-life episode of Succession, LVMH chairman Bernard Arnault prompted widespread speculation in January 2023 when he promoted his daughter Delphine Arnault to head of couture fashion house Dior.   

Then, in November 2023, the so-called ‘wolf in cashmere’ announced that his son Then, this week, it was rumoured that two more of the Arnault brood would be appointed to the LVMH board.

If this proves true, it will mean that four out of Arnault’s five children will be board members, without any of them yet confirmed to be his successor for ultimate control of the LVMH group.

Outlook for 2024

The year 2024 ahead will also be an historic one for the group. As of February 1st next month, Michael Burke will begin acting as LVMH’s chairman and CEO, the first time in the company’s history that anyone other than Arnault has done so since the conglomerate came to be in 1987.

In its own internal outlook for 2024, LVMH had this to say:

Separately, Bloomberg has opined that 2024 could be a good year overall for luxury goods compared with 2023.