Lvmh closes 2020 with a drop in profit and turnover due to Covid, but there are still reasons to smile. Meanwhile, the French luxury giant has staged a striking stock market rally in recent months, which has brought capitalization to grow by a good 42 billion euros since October: today it is close to 260 billion. Then, despite the halt to international travel heavily penalizing travel retail, there were good signs of business recovery as early as the third quarter, and even more so in the fourth. In fact, if in the calendar year, compared to 2019, sales fell by 17% to 44,7 billion and profit by 34% to 4,7 billion, Lvmh recorded: cash flow stability at 6,1 billion , a double-digit growth in the sales of Louis Vuitton and Christian Dior in the last two quarters, and in general a good trend reaction of the Fashion sector in the fourth quarter, compared to the first nine months of the year.
The operating result, which fell by 28% in 2020 to 5,8 billion, also showed a growth of 7% in the second half. The recovery, explains a note, is due to various factors: if it is true that the European retail market is still at a standstill, instead that of the United States and above all the Chinese one, which has been traveling at full capacity for months, has regained strength. Also, in 2020 there was a strong acceleration of online sales, which largely compensated for the closure of the shops due to the various lockdowns around the world. If it is true that the most resilient sector was that of Fashion, Lvmh also points out the exploit of Hennessy Cognac, which has been very strong especially in the USA and above all from the summer onwards. The worst sector was instead that of Perfumes and Cosmetics, with sales down by 22% and the operating result collapsing by 88%.
Another reason to remember despite all 2020 was the finalization of the agreement, complicated but ultimately successful, with the American jewelery maison Tiffany: in 2021 the brand made famous by Audrey Hepburn will make its debut within the group and this means that the guidance for this year is cautious, albeit "in a context that is still very disturbed". Finally, the dividend: on April 15th the Board of Directors will propose to the shareholders' meeting a coupon of 6 euros per share, with the deposit of 2 euros already paid last December and the rest to be paid at the end of April.
