LVMH, the world’s leading luxury group, more than recovered from the coronavirus pandemic, posting Thursday record sales and net profit for 2021.
The group, which includes the Louis Vuitton, Dior, and Celine fashion brands as well as Moet & Chandon champagne, took in a record €64.2 billion ($71.5 billion) in 2021.
An increase of 44 percent from last year, when the sector took a major hit from store closures, it was also a 20 percent rise from before the pandemic in 2019.
Net profit hit €12 billion, a 156 percent increase from 2020 and up 68 percent compared to 2019.
“Despite the uncertainties that remain at the start of this new year, which continues to be disrupted by health concerns, we approach 2022 with confidence and are convinced that LVMH is in an excellent position to further strengthen its lead in the global luxury market,” chief executive Bernard Arnault said in a statement.
The company’s results easily surpassed the analyst consensus forecast compiled by Bloomberg, which was for €62.2 billion in sales and €10.7 billion in net profit.
One reason for the luxury group’s out-performance was an improvement in profitability. Its operating margin rose to 26.7 percent, up from 21.4 percent in 2019.
The highlights
LVMH said its achievements in 2021 included “major success” of champagne and cognac, and “exceptional performance” by the Fashion & Leather Goods business group.
In the latter case, the group highlighted the business of Louis Vuitton, Christian Dior, Fendi, Celine, and Loewe, which achieved “record levels” of revenue and profitability.
LVMH said it also saw “strong revenue growth” in Asia and the United States and a “gradual recovery” in Europe, besides continued growth in online sales.
However, it also said travel retail activities were “still held back” by the current condition of international travel.
LVMH plans to reward shareholders with a dividend of €10, up from €6 last year.
Success in the groups
Wines & Spirits: LVMH’s wines and spirits business group recorded organic revenue growth of 26 percent in 2021 compared to 2020 and 9 percent compared to 2019.
Profit from recurring operations was up 34 percent compared to 2020.
The rebound in consumption, in an environment already seeing supply constraints, brought further impetus to the strategy of value creation.
Growth was particularly strong in the United States and Europe, which benefited from the reopening of restaurants and the gradual recovery in regional tourism.
Fashion & Leather Goods: The fashion and leather goods business group recorded organic revenue growth of 47 percent in 2021 compared to 2020 and 42 percent compared to 2019.
With organic revenue growth of 51 percent compared to 2019, the fourth quarter showed a sharp rise compared to previous quarters.
Profit from recurring operations was up 79 percent compared to 2020 and 75 percent compared to 2019.
Louis Vuitton, which celebrated the 200th anniversary of the birth of its founder, enjoyed a remarkable performance, driven by the success of Nicolas Ghesquière’s creations for the feminine universe of the Maison.
Christian Dior Couture had an excellent year with exceptional growth in all its product categories among local customers.
The latest fashion shows in Athens and Paris, highlighting the inspiring collections of Maria Grazia Chiuri and Kim Jones, received a tremendous reception.
Following its huge success in Paris, London and Shanghai, the Christian Dior, Designer of Dreams exhibition was inaugurated in New York.
Celine, thanks to Hedi Slimane and to the success of his collections, and Fendi, driven by the success of Kim Jones collections, had a record year.
Loewe, energized by the talent of JW Anderson, and Marc Jacobs also performed particularly well.
Perfumes & Cosmetics: The perfumes and cosmetics business group recorded organic revenue growth of 27 percent in 2021 compared to 2020. Organic revenue was stable compared to 2019.
Profit from recurring operations was nearly nine times higher than 2020 and returned to 2019 levels.
Christian Dior benefited from the success of Miss Dior and Sauvage. In 2021, Sauvage became the highest-selling fragrance in the world (women’s and men’s lines included).
The continued growth of the Collection Privée and the skincare lines Prestige, Capture Totale and L’Or de Vie also contributed to the progress of the Maison.
Guerlain recorded a good performance, driven by its Abeille Royale and Orchidée Impériale skincare lines.
Maison Francis Kurkdjian continued to enjoy rapid growth momentum thanks to the ongoing success of Rouge 540, particularly in the United States.
Watches & Jewelry: The watches and jewelry business group recorded revenue growth of 167 percent in 2021 compared to 2020 thanks to Tiffany, consolidated for the first time.
Profit from recurring operations was almost six times higher than in 2020 and up 128 percent compared to 2019.
For its first year in the group, Tiffany saw record performance in terms of revenue, profits and cash flow, and increased its global attractivity as a result of its high impact innovations and collaborations.
High-end jewelry sales in particular reached an all-time high with the huge success of its annual High-End Jewelry Blue Book collection.
A global “About Love” campaign featuring Beyoncé and Jay-Z was launched. The revenue and profits achieved a sharp increase compared to 2019.
Bvlgari enjoyed good momentum, driven by the growth of the iconic lines in its own stores.
The Maison accelerated the selectivity of its multi-brand network distribution and expanded its own boutiques.
Chaumet unveiled an exclusive diamond cut, the Taille Impératrice, and showcased its unique heritage through the “Joséphine and Napoléon” exhibition at the heart of the Maison’s iconic 12 place Vendôme address in Paris.
In watchmaking, TAG Heuer inaugurated a major partnership with Porsche and successfully launched a Super Mario limited edition of its smartwatch for gaming enthusiasts.
Hublot had an excellent performance, particularly in the United States and China. Fred continued its strong growth. The new products at Zenith have been highly successful.
(With agency inputs)