Revenge Spending Focused on Luxury Goods... LVMH's 'Surprise Performance' Last Year

[Asia Economy Reporter Yujin Cho] French luxury group Louis Vuitton Mo?t Hennessy (LVMH), which owns famous luxury brands such as Louis Vuitton and Dior, posted results last year that surpassed pre-COVID-19 pandemic levels. The prolonged COVID-19 pandemic led to a surge in luxury revenge spending, resulting in a sharp increase in sales.

On the 27th (local time), LVMH announced that its sales last year reached 64.2 billion euros (approximately 86.4363 trillion KRW), a 44% increase compared to the previous year.

This exceeded the market expectation of 62.5 billion dollars compiled by financial information firm FactSet, and represented a 20% increase compared to 2019, before the COVID-19 pandemic.

Net profit surged to 12 billion euros, up 156% from the previous year and 68% compared to 2019. This also significantly exceeded market expectations of 10.9 billion euros.

LVMH's operating profit margin improved substantially, rising from 21.4% in 2019 to 26.7% in 2021.

Bloomberg reported that the luxury industry is showing a V-shaped recovery due to the economic rebound from COVID-19 and a rapid increase in assets.

Fashion products especially drove the sales growth. Last year, sales of fashion products increased by 42% compared to 2019. As various COVID-19 restrictions gradually eased, customers flocked back to stores, resulting in brisk sales from Louis Vuitton sneakers to Tiffany engagement rings.

Bernard Arnault, CEO of LVMH, stated, "We have confirmed that LVMH holds an outstanding position leading the global luxury market."

Buoyed by strong performance, LVMH also decided to raise its stock dividend by 10 euros per share.

This content was produced with the assistance of AI translation services.