In line with our outlook for prestige luxury’s Q4 and the results from Richemont, LVMH reported solid Q4 results for its U.S. business region, with +8% revenue growth year-over-year, up from Q2 (-1%) and Q3 (+2%). In our view, the “repatriation of luxury spending” and a slow recovery in cognac drove the faster pace. Sephora was highlighted again for having a “spectacular year” with the press release calling out its "thriving collaboration with Kohl’s", indicating that there is more collaboration to come. LVMH CEO Bernard Arnault also noted, “Sephora has managed to exceed all our forecasts.” He went on to say that LVMH as a whole was "very confident to continue the growth that was achieved in 2023" and highlighted declining interest rates as one driver. Arnault also stated that, “The positive impact in the U.S. of the coming election. Every time the election in the U.S., the market is more dynamic. We expect the U.S. market to be more dynamic in 2024 than it was in 2023.” He uses the word “dynamic” to mean “faster growth”, which is interesting. For context, the U.S. region grew +10% in Q4 2016, which was +100 basis points faster than the 2016 year-to-date trend.
