Rebound in fashion & leather goods business boosts LVMH sales
27 Jan 2021
LVMH Moët Hennessy Louis Vuitton recorded revenue of 44.7 billion euros in 2020, down 17 percent, while organic revenue declined 16 percent compared to 2019. The company said, with an organic revenue decline of only 3 percent in the fourth quarter, the group saw a significant improvement in trends in all its activities compared to the first nine months of 2020. Fashion & Leather Goods reported double-digit growth in both the third and fourth quarters.
The company added that while Europe is still affected by the crisis, the United States saw a good recovery and Asia grew strongly. Profit from recurring operations of 8.3 billion euros declined 28 percent over the year due to a return to growth in the second half, which was up 7 percent and operating margin reached 18.6 percent, while group share of net profit amounted to 4.7 billion euros, down 34 percent.
Commenting on the annual trading, Bernard Arnault, Chairman and Chief Executive Officer of LVMH, said in a statement: “LVMH showed remarkable resilience against the unprecedented health crisis the world experienced in 2020. We are starting 2021 with the pleasure of welcoming the iconic jewelry Maison Tiffany and its teams to our group."
LVMH performance across core categories in 2020
In 2020, the Fashion & Leather Goods business recorded a decrease in organic revenue of 3 percent or 5 percent drop to 21,207 million euros in an environment marked by the closure of stores over a period of several months. LVMH said, the second half saw a rebound in activity, with double-digit organic revenue growth in both quarters. China recorded a strong recovery in revenue beginning in April and the United States in July. The brands’ strict cost management made it possible to limit the decline in profit from recurring operations to 2 percent.
The Perfumes & Cosmetics business group recorded a 23 percent or 22 percent decline in organic revenue in 2020 to 5,248 million euros, while the category’s profit from recurring operations was down 88 percent. The company added that Christian Dior saw a gradual improvement in the second half of the year, underpinned by the success of its new products Miss Dior Roses N’Roses and J’adore Infinissime in perfume, and Rouge Dior in makeup, Guerlain benefited from the remarkably dynamic skincare market, with the continued success of Abeille Royale and Orchidée Impériale, while the new skincare brand Fenty Skin, developed by Rihanna, is showing positive signs.
The Watches & Jewelry business group saw its revenue drop by 24 percent to 3,356 million euros with organic revenue decline of 23 percent in 2020, with a strong improvement in trends in the fourth quarter, which fell only 2 percent. Profit from recurring operations was down 59 percent. Bvlgari witnessed a strong recovery in China. Chaumet inaugurated its new store at its historic address on Place Vendôme in Paris at the start of 2020 and strengthened its presence in China. In the watch sector, Tag Heuer celebrated its 160th anniversary with several limited editions in the Carrera collection and launched the third generation of its smartwatch in New York.
The Selective Retailing business group saw organic revenue decline by 30 percent and reported revenue decline of 31 percent to 10,155 million euros in 2020. Profit from recurring operations amounted to negative 203 million euros. Sephora, LVMH said, demonstrated good resilience during the health crisis. A new partnership has been signed with the American retailer Kohl's, whose stores are expected to accommodate 200 beauty spaces dedicated to Sephora in 2021. DFS saw a significant decline in its activity in most destinations due to the total suspension of international travel.
The company further said that at the Annual General Meeting of April 15, 2021, LVMH will propose a dividend of 6 euros per share. An interim dividend of 2 euros per share was paid on December 3 of last year. The balance of 4 euros will be paid on April 22, 2021.