LVMH (LVMHF), one of the world’s wealthiest companies and the luxury conglomerate behind brands like Louis Vuitton, Christian Dior and Tiffany & Co., revealed record revenue yesterday (July 25) for the first half of 2023. Headed by CEO and chairman Bernard Arnault, LVMH brought in 42.2 billion euros ($46.6 billion) over the past six months—a 15 percent increase compared to the previous year.
LVMH, which is headquartered in Paris, saw its sales increase across Europe by 22 percent compared to the same period in 2022. Consumers in Asia, excluding Japan, also contributed to the record-breaking revenues, with sales rising in the region by 23 percent. Besides wine and spirits, sales across the rest of the company’s business sectors rose as well. “LVMH achieved outstanding results during a six-month period of ongoing economic and geopolitical uncertainty,” said Arnault in a statement, adding that the company is approaching “the second half of the year with confidence and optimism.”
But it didn’t fare quite as well in the U.S., where it saw only a 3 percent increase in sales. “We experienced a little bit of pressure with the American customer to varying degrees among brands,” said Jean-Jacques Guiony, chief financial officer at LVMH, during the company’s second-quarter earnings call. The conglomerate is seeing a decline in shopping from “aspirational customers” in the U.S., according to Guiony, who suggested that waning Covid-related benefits may be playing a part. “If we assume that this is coming from a special group of customers that were benefiting from subsidies in the Covid pandemic period, those will come to an end at some point,” he said.
However, the company’s creative momentum in the U.S. has thrived in the past six months, according to Arnault, who noted the “enthusiastic reception” of the Louis Vuitton men’s show in June. Under the helm of its new creative director Pharrell Williams, the fashion event attracted 1.1 billion views across social media.
More renovations for Tiffany boutiques
Earlier this year, LVMH also unveiled its renovated Tiffany flagship store in New York City—something that should be expected from other Tiffany stores in the future, said Guiony, adding that most of the boutiques will be renovated within the next four years. “Not one single store, apart from the few we have already renovated, are up to our standards,” he said. “It will take time and a lot of money to do them.”
The conglomerate’s CFO also discussed the recent real estate buying spree by LVMH, which has spent more than $1 billion on new properties. “It’s quite opportunistic,” he said, adding that the company is purchasing stores in locations like Paris, London, New York and Los Angeles, where rental fees are set to rise substantially over the next few years. “There may be more to come, but it will depend on the quality of the opportunities that we see.”
The company’s successful earnings come on the heels of its recently announced partnership with the Paris 2024 Olympic and Paralympic Games. LVMH’s companies are set to participate in next year’s games, with jeweler Chaumet designing the medals, Moet Hennessy providing wines and spirits and Sephora helping with activations along the route of the Olympic Torch Relay. Meanwhile, its other brands will announce engagements with the sporting events over the next few months.
