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French luxury conglomerate Louis Vuitton Moët Hennessy (LVMH) has reported record revenue and profit for 2022.
LVMH declared revenue of €79.2 billion ($AU121.03 billion) while profit from recurring operations was €21.1 billion ($AU32.24 billion), both 23 per cent increases on a year-by-year comparison.
Sales in Europe, the US, and Japan increased significantly due to strong demand from local customers and the recovery of international travel.
Asia meanwhile was described as ‘stable’ over the year due to pandemic developments in China.
LVMH chairman Bernard Arnault said these results would give the company confidence amid an uncertain future.
“Our performance in 2022 illustrates the exceptional appeal of our maisons [brands] and their ability to create desire during a year affected by economic and geopolitical challenges,” he said.
“We approach 2023 with confidence but remain vigilant due to current uncertainties. We count on the desirability of our maisons [brands] and the agility of our teams to further strengthen our lead in the global luxury market and support France’s prestige throughout the world.”
Watches and jewellery specifically recorded an 18 per cent increase in revenue. Tiffany & Co was a driving force with a ‘record year’ off the back of the popularity of the new Lock bracelet collection.
LVMH oversees 75 brands including Tiffany & Co, TAG Heuer, Bulgari, Chaumet, Zenith, and Hublot.
Daniel Langer, executive professor at Pepperdine University in the US, told Forbes that LVMH’s decision to raise prices in the luxury sector has played a crucial role in the success of its brands in an otherwise turbulent economy.
“The stellar performance of LVMH’s top brands, including Louis Vuitton and Dior, is the result of an uncompromising focus on brand equity building, brand storytelling, and precise execution of the brand experiences,” Langer said.
“Over the past two years, the leading brands increased prices beyond historical precedent, translating the continuous brand equity building into profitable growth.”
During the 26 January earnings call, Arnault said LVMH would persist with this strategy.
“We plan to increase our lead across market segments,” he said.
“We’ll be able to continue to develop our investments and gain market share, because even when the situation is somewhat more challenging, from one month to next, we continue to invest, whereas some of our peers may have tighter financial constraints, they stop investing or they invest less. And so, things are more difficult afterward.”
LVMH recently reached a market capitalisation of €400 billion ($AU623.93 billion) for the first time and is now the 13th most valuable company in the world.
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