French luxury group LVMH saw its turnover grow by 15 % in 2019, achieving a sales record once again. Yet protests in Hong Kong weighed on the luxury group’s last quarter, and analysts are holding their breath for the consequences of the coronavirus.
Record profit and turnover
The luxury holding company ended 2019 with a turnover of 53.7 billion euros, slightly more than what analysts had expected. Operational profits also grew by 15 %, reaching 11.5 billion euros, and net profit was 13 % higher at 7.2 billion euros. The fashion and leather departments performed particularly well, particularly thanks to Louis Vuitton and Christian Dior. CEO Bernard Arnault said that he was proud of the new record year.
In the past quarter, however, sales growth slowed down: the 12 % growth led to sales of 15.3 billion, but a quarter earlier there was still a 17 % growth. The quarterly results were therefore slightly below analyst expectations which, according to Belgian newspaper De Tijd, was mainly due to student protests in Hong Kong.
In its own words, LVMH is looking forward to the coming year with ‘cautious confidence’. Arnault mentions an uncertain geopolitical context as a challenge, but analysts and investors especially point to the threat of the coronavirus on the important Chinese market. Since the epidemic came to light, large luxury groups such as Kering, Richemont and LVMH have lost 30 billion euros in market capitalisation in total, according to calculations by L’Echo. LVMH itself does not mention the virus in its annual report.