Paris-Listed Shares Surge Following Dividend Hike
Shares of LVMH Moet Hennessy Louis Vuitton, the luxury conglomerate headquartered in Paris, experienced a significant surge on Friday. This impressive rally was fueled by the company’s decision to increase its dividend after achieving record-breaking results in 2023. The entire luxury sector benefited from this upward trend, offering some respite amidst the recent industry slowdown.
LVMH, which owns renowned brands such as Christine Dior and Tiffany & Co, witnessed a remarkable 10% increase in sales during the fourth quarter, reaching €23.9 billion. Consequently, their full-year revenue skyrocketed, setting all-time highs at €86.2 billion.
Moreover, the conglomerate’s net income rose by 8% to €15.2 billion, reflecting sales growth across all business segments except for the wine & spirits division, encompassing Hennessy cognac and Moët & Chandon champagne.
Positive Trend Ripples Across the Luxury Goods Industry
The luxury goods sector as a whole experienced a boost in share prices. Companies such as Hermes International, Kering, Christine Dior, and Prada all benefited from this rally, albeit after enduring a challenging year. The industry, which was severely impacted by a decrease in consumer spending following the end of the COVID-19 boom, found some solace in the market’s positive response.
According to LVMH CEO Bernard Arnault, the company enters 2024 with confidence, despite signs of sales growth slowing down in the latter half of 2023 due to an increasingly uncertain macroeconomic and geopolitical landscape. LVMH’s sales grew at slower rates of 9% in Q3 and 10% in the final quarter of 2023, compared to the robust 17% growth experienced during the first and second quarters.
Arnault, however, remains optimistic about 2024. In a call with investors, he expressed expectations of sales being boosted by lower interest rates and the dynamic nature of the U.S. election cycle.
These impressive results coincide with Arnault’s recent decision to nominate his two sons, Alexandre (31) and Frédéric (29), for positions on LVMH’s board of directors. This move further solidifies the family’s control over the luxury conglomerate.