Reporting fourth-quarter and full-year results Tuesday, French luxury conglomerate LVMH Moët Hennessy Louis Vuitton says it’s “well equipped” to build on a hoped-for recovery in 2021 and “regain growth momentum” companywide.
In a Nutshell: The luxury group also said it “enters 2021 with cautious confidence,” aiming to reinforce its global leadership position in luxury goods.
In the second half, LVMH said its “brands’ strict cost management made it possible to limit the decline in profit from recurring operations to 2 percent. Louis Vuitton, always driven by exceptional dynamism and creativity, was able very quickly to transform and revitalize its customer relations with a high quality and efficient digital service.”
“LVMH showed remarkable resilience against the unprecedented health crisis the world experienced in 2020. Our priority has been to protect the health and safety of our employees and our clients and we have provided direct support in the fight against the pandemic. Our Maisons have shown great agility and creative energy in continuing to bring to life our customers’ dreams through a unique digital experience thereby further strengthening their desirability,” Bernard Arnault, LVMH’s chairman and CEO, said. “Our focus on dynamic innovation was accompanied by strong commitments to the environment, sustainability and inclusion.”
Net Sales: Like-for-like sales in the fourth quarter ended Dec. 31 for its fashion and leather goods group rose 18 percent.
LVMH said its fashion and leather goods group “enjoyed a remarkable performance, with double-digit growth in both the third and fourth quarters.” It said Europe is still affected by the coronavirus pandemic, but that the U.S. saw a good recovery and that Asia grew strongly. China’s recovery began in April and the U.S. in July, it added.
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Overall group sales in 2020 were down 17 percent to 44.65 billion euros ($54.3 billion) from 53.67 billion euros ($65.27 billion). The company said comparable sales fell “only 3 percent in the fourth quarter,” and that it saw “significant” improvement in trends in all its activities, compared with the first nine months of 2020.
“LVMH showed good resilience in 2020 in an economic environment severely disrupted by the serious health crisis that led to the suspension of international travel and the closure of the Group’s stores and manufacturing sites in most countries over a period of several months,” it said.
Earnings: For the year, net profits for the group fell 34 percent to 4.70 billion euros ($5.72 billion) from 7.17 billion euros ($8.72 billion).
CEO’s Take: “We are starting 2021 with the pleasure of welcoming the iconic jewelry Maison Tiffany and its teams to our Group. In a context that remains uncertain, even with the hope of vaccination giving us a glimpse of an end to the pandemic, we are confident that LVMH is in an excellent position to build upon the recovery for which the world wishes in 2021 and to further strengthen our lead in the global luxury market,” Arnault said.