$LVMH Moet Hennessy Louis Vuitton (LVMHF.US)$ On January 26,...
$LVMH Moet Hennessy Louis Vuitton (LVMHF.US)$ On January 26, the world's largest luxury goods group LVMH announced its fourth quarter and fiscal year 2022 financial data ending in December. The annual sales increased by 23% to 79.18 billion euros, reaching a historic high. The operating profit also increased by 23% to 21.055 billion euros, and the net profit increased by 17% to 14.1 billion euros. The operating free cash flow exceeded 10 billion euros.
The growth in performance is mainly benefited from retaliatory consumption by consumers in Europe, the United States, and Japan since the beginning of the year, with the best performance in the European market. Due to the strong US dollar, American tourists have flocked to Europe and Japan for travel and shopping. The revenues of the European, American, and Japanese markets have increased significantly, with growth rates of 35%, 15%, and 31% respectively. The Asian market, except for Japan, has improved from an 8% decline in the previous quarter by recording a 6% increase, although the situation in China has improved compared to the second quarter, store traffic has not yet recovered to normal.
From a business line perspective, in the 2022 fiscal year, LVMH Group achieved significant growth in sales revenue for all business lines, increasing its global market share.
1. The fashion and leather goods business performed exceptionally well, with a growth rate of 25% to 38.648 billion euros: Louis Vuitton, Dior, Celine, and Fendi all achieved record levels of revenue and profit. Louis Vuitton's revenue exceeded 20 billion euros for the first time, contributing a quarter of the Group's revenue. Dior's sales have roughly doubled in the past two years to 9 billion euros, surpassing Hermes' 8.982 billion euros in revenue in 2021.
2. Selective retail business revenue increased by 26% to 14.852 billion euros: with the recovery of global travel retail, Sephora's revenue and profits reached new record highs, with strong performance in North America, Europe, the Middle East, and most Southeast Asian countries. At the same time, the Group further invested in Sephora's omni-channel strategy, continuously improving the purchasing experience online and in stores.
3. Perfumes and cosmetics business revenue increased by 17% to 7.722 billion euros, with organic revenue growth of 10%: operating profit declined due to the cost increase caused by global inflation. Dior's fragrance, makeup, and skincare products remain the main drivers of growth, with Dior's Sauvage fragrance maintaining its leading position, and Fenty Beauty benefiting from expanded distribution networks and the launch of new products.
4. Watches and jewelry business revenue increased by 18% to 10.581 billion euros: driven by the high-end strategy, Tiffany's high-end jewelry revenue doubled, and Bulgari continued to show strong growth, especially in the European, Japanese, and American markets. Tiffany's brand appeal is growing, and in the 2022 fiscal year, its performance reached a record high, with high-end jewelry revenue doubling. In order to consolidate its position as a high-end jewelry brand, Tiffany raised its product prices globally again in November last year, with price increases in the Chinese market ranging from 20% to 59%. In terms of brand marketing, the brand is also striving to create a new classic and replicate the word-of-mouth effect generated by the movie "Breakfast at Tiffany's."
Although LVMH's business in China was impacted last year, Asia is still the largest market for LVMH, accounting for 37% of total sales, followed by the United States, accounting for 27%, and Europe and France, accounting for 24%. Other global markets account for 12%. As of the end of the reporting period, LVMH had 5,664 stores worldwide, a net increase of 108 stores from the previous year.
Bernard Arnault, CEO of LVMH, stated in the financial report that although last year was filled with uncertainties, the positions of their respective brands in their respective fields were consolidated or even enhanced. In the future, they will increase investment in products and distribution networks, while also diversifying their layout and further strengthening their leading position in the global luxury goods market.
The growth in performance is mainly benefited from retaliatory consumption by consumers in Europe, the United States, and Japan since the beginning of the year, with the best performance in the European market. Due to the strong US dollar, American tourists have flocked to Europe and Japan for travel and shopping. The revenues of the European, American, and Japanese markets have increased significantly, with growth rates of 35%, 15%, and 31% respectively. The Asian market, except for Japan, has improved from an 8% decline in the previous quarter by recording a 6% increase, although the situation in China has improved compared to the second quarter, store traffic has not yet recovered to normal.
From a business line perspective, in the 2022 fiscal year, LVMH Group achieved significant growth in sales revenue for all business lines, increasing its global market share.
1. The fashion and leather goods business performed exceptionally well, with a growth rate of 25% to 38.648 billion euros: Louis Vuitton, Dior, Celine, and Fendi all achieved record levels of revenue and profit. Louis Vuitton's revenue exceeded 20 billion euros for the first time, contributing a quarter of the Group's revenue. Dior's sales have roughly doubled in the past two years to 9 billion euros, surpassing Hermes' 8.982 billion euros in revenue in 2021.
2. Selective retail business revenue increased by 26% to 14.852 billion euros: with the recovery of global travel retail, Sephora's revenue and profits reached new record highs, with strong performance in North America, Europe, the Middle East, and most Southeast Asian countries. At the same time, the Group further invested in Sephora's omni-channel strategy, continuously improving the purchasing experience online and in stores.
3. Perfumes and cosmetics business revenue increased by 17% to 7.722 billion euros, with organic revenue growth of 10%: operating profit declined due to the cost increase caused by global inflation. Dior's fragrance, makeup, and skincare products remain the main drivers of growth, with Dior's Sauvage fragrance maintaining its leading position, and Fenty Beauty benefiting from expanded distribution networks and the launch of new products.
4. Watches and jewelry business revenue increased by 18% to 10.581 billion euros: driven by the high-end strategy, Tiffany's high-end jewelry revenue doubled, and Bulgari continued to show strong growth, especially in the European, Japanese, and American markets. Tiffany's brand appeal is growing, and in the 2022 fiscal year, its performance reached a record high, with high-end jewelry revenue doubling. In order to consolidate its position as a high-end jewelry brand, Tiffany raised its product prices globally again in November last year, with price increases in the Chinese market ranging from 20% to 59%. In terms of brand marketing, the brand is also striving to create a new classic and replicate the word-of-mouth effect generated by the movie "Breakfast at Tiffany's."
Although LVMH's business in China was impacted last year, Asia is still the largest market for LVMH, accounting for 37% of total sales, followed by the United States, accounting for 27%, and Europe and France, accounting for 24%. Other global markets account for 12%. As of the end of the reporting period, LVMH had 5,664 stores worldwide, a net increase of 108 stores from the previous year.
Bernard Arnault, CEO of LVMH, stated in the financial report that although last year was filled with uncertainties, the positions of their respective brands in their respective fields were consolidated or even enhanced. In the future, they will increase investment in products and distribution networks, while also diversifying their layout and further strengthening their leading position in the global luxury goods market.
In addition, the group invested nearly 5 billion euros in operational expenditures during the reporting year, mainly for expanding store networks, upgrading production facilities, and recruiting human resources. The group's free cash flow from operations exceeded 10 billion euros this year.
Given the continued high demand for luxury goods from wealthy consumers worldwide, the layout of the supply chain has also been prioritized by LVMH. Following Fendi and Dior, Louis Vuitton will establish a new factory in the town of Sieci in Tuscany, Italy, to produce core brand Louis Vuitton handbags and other leather accessories, making it the largest workshop in Italy for LVMH.
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