LVMH shares jump 8% as earnings point to luxury sector resilience

LVMH shares jumped more than 8% on Friday morning, after the world’s largest luxury group posted higher-than-expected sales for 2023 and raised its annual dividend.

The owner of Louis Vuitton, Moët & Chandon and Hennessy, as well as brands including Givenchy, Bulgari and Sephora, on Thursday night reported sales amounting to 86.15 billion euros ($93.34 billion) for 2023, exceeding consensus forecasts and equating to 13% organic growth from the previous year.

Organic revenue was up 10% in the fourth quarter.

The result was boosted in particular by 14% annual growth in the critical fashion and leather goods sector, along with 11% growth in perfumes and cosmetics. Wines and spirits meanwhile posted a 4% decline.

“Our performance in 2023 illustrates the exceptional appeal of our Maisons and their ability to spark desire, despite a year affected by economic and geopolitical challenges,” Bernard Arnault, chairman and CEO of LVMH, said in a statement.

“While remaining vigilant in the current context, we enter 2024 with confidence, backed by our highly desirable brands and our agile teams.”

After a boom during the pandemic, the luxury sector endured a rough end to 2023 as challenging geopolitical and macroeconomic conditions weighed on consumer spending, particularly in the U.S. and China.

LVMH in April 2023 became the first European company to surpass $500 billion in market value, but a share price decline over the last six months allowed it to be eclipsed as Europe’s largest company by Danish pharmaceutical giant Novo Nordisk.

British luxury brand Burberry earlier this month issued a profit warning in response to slowing demand, as the balloon in high-end spending that peaked during the pandemic loses air. At the time, the news sent Burberry shares plunging and dragged…