The French luxury goods group recorded revenue of €42.2bn for its 2023 half-year results, which was up by 15% on the same period in 2022, but down from the growth recorded in Q1.
Speaking of the growth slowdown on its quarterly earnings call, the group’s chief financial officer Jean-Jacques Guiony said: “We never said that growing 20% per annum, as we’ve been doing roughly speaking, is a new normal.”
The slower growth was attributed to fewer US consumers buying luxury goods, as well as lower-than-expected margins due to high marketing spending.
However, sales to Chinese consumers regained momentum and were stronger than the previous quarter.
Makeup and fragrance continued to be a strong point for LVMH, which it said was: “supported by a highly selective and high-quality distribution policy.”
The Perfumes & Cosmetics business group recorded organic revenue growth of 13% in the first half of 2023. Profit from recurring operations was up 15%.
Strong sales for Christian Dior
Christian Dior had an outstanding quarter and the company said it was “strengthening its leadership in its strategic markets.”
Men’s fragrance Sauvage confirmed its position as the world’s leading perfume, while women’s scents J’adore and Miss Dior both enjoyed continued success.
The house’s makeup offering also contributed to the strong results and notable products were its Dior Addict Lip Maximizer and Forever Skin Correct foundation.
Its skin care ranges also enjoyed excellent performance, particularly its Prestige range in Asia’s premium segment.
During the results call, a special mention was given to Christian Dior’s new sustainability initiative, where it is currently transitioning to producing 45% of its alcohol for fragrance formulations using beetroot. Givenchy and Kenzo are also doing the same.
Other noteworthy fragrance houses were Maison Francis Kurkdjian, which saw continued success with the development of its Baccarat Rouge 540 range.
LVMH revealed the brand had been working with Le Jardin de Parfumeur – a garden in the Trianon estate in the Palace of Versailles – where hundreds of perfume plants are being grown for fragrance production.
The group said Acqua di Parma had also “increased the exclusivity of its offering”.
An exceptional quarter for Sephora
LVMH said Guerlain continued to grow, driven by its Abeille Royale skincare range and high-end perfumery collection l’Art et la Matière, which has recently launched a new Jasmin Bonheur creation.
Givenchy benefited from a great reception for its new fragrance Gentleman Society.
Benefit expanded its The Porefessional skincare range and launched a new brow lamination service in store.
Makeup Forever saw good results, especially for is new HD Skin Powder. And Fenty Beauty’s new Hella Thicc mascara is already one of the Maison’s bestsellers.
Sephora had an exceptional performance this quarter, which the company said “confirmed its position as world leader in beauty retail.”
The retailer continued to gain market share and momentum was particularly strong in North America, Europe and the Middle East. Its distribution network continued to expand, especially in the UK where its first store, which opened in March 2023, has proved a huge success.
The retailer plans to open a second store this November in Westfield Stratford City shopping centre in London.
CEO Bernard Arnault highlighted the group’s “strong creative momentum and excellent distribution”. He also said: “thanks to the desirability of our brands, we approach the second half of the year with confidence and optimism, but will remain vigilant within the current environment and count on the agility and talent of our teams to further strengthen our global leadership position in luxury goods in 2023.”
News also broke that LVMH has signed as an official partner for the Paris 2024 Olympic Games. The company didn’t disclose the value of the deal.
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