How Long Can LVMH Keep Up Its Winning Streak?
This week, everyone will be talking about LVMH’s latest results, the return of Coachella and an important US inflation gauge.
Inflated Expectations
- LVMH reports first-quarter results on April 12
- The Louis Vuitton and Dior owner has reported a series of blockbuster quarterly sales and profits
- Maintaining that pace of growth will be harder now that the comparison is to last year rather than the early phase of the pandemic
LVMH has a problem most companies would gladly take on: the luxury giant has grown so quickly for so long that an otherwise excellent quarter might look so-so by recent standards. LVMH’s sales grew 44 percent last year, an unusual figure for a company of its size (though sales were also up an impressive 20 percent from 2019). The conglomerate is unlikely to maintain that pace.
That doesn’t mean Louis Vuitton or Dior are showing any signs of slowing momentum, though future growth will depend partially on Celine following through on LVMH’s plans to make it the next anointed megabrand. One test is whether Sephora and the conglomerate’s travel retail empire are ready to take off. DFS continues to lose money for its parent, and while the sector is innovating around the pandemic disruptions, including new online services and a big investment by DFS in Hainan, there’s little else to be done but wait until tourists return to airports in their pre-pandemic numbers. Sephora is more clearly on a path to recovery, though LVMH said in January sales had yet to reach 2019 levels.
The Bottom Line: One of the perks of being a category-spanning colossus is that there’s always some new growth lever to pull.