The world’s affluent are drinking more champagne and buying more new designer gowns and pricey handbags than they were before the COVID-19 pandemic, according to new financial results from luxe conglomerate LVMH.
The French company—whose brands include Louis Vuitton, Christian Dior, and Tiffany—said on Monday that second-quarter revenue was 14.7 billion euros, or $17.5 billion, some 14% above where they were in the same-period two years ago before the pandemic struck.
Consumers in China and the U.S., the two top luxury markets, kept spending with abandon, ignore growing concerns that the delta variant could hurt travel or bring about new lockdowns or that affluent shoppers had found other things to splurge on. So far in 2021, excluding the impact acquisitions, LVMH’s revenue is up 53%.
“The creativity, the high-quality and enduring nature of our products and the sense of responsibility that drives us, have been critical in enabling us to successfully withstand the effects of the pandemic,” said Bernard Arnault, LVMH’s CEO and top shareholder, and the second richest man in the world behind Amazon executive chairman Jeff Bezos, according to Forbes rankings last year.
The company’s fashion and leather goods division—its biggest vertical—fueled the bulk of LVMH’s growth, led by fashion brands Dior, Fendi, Loewe, and Celine enjoying record sales and profitability. Consumers—Americans and Europeans, in particular—treated themselves to a lot of Moët champagne, leading the category’s sales up 10%. “This update should reassure, as the sector goes through an inflection,” Bernstein analyst Luca Solca said in a research note about luxury’s strength. (Rivals Kering, Hermès, and Moncler will report their results this week.)
Booming stock markets and growing income inequality are fueling the luxury boom. But LVMH is also enabling its own strong results: the biggest luxury company in the world has the financial means to easily outspend rivals on marketing and social media campaigns. “It’s certainly not the mood of the various brands, particularly in fashion and leather…to stay quiet, particularly from a marketing viewpoint,” LVMH finance chief Jean-Jacques Guiony told analysts, according to Reuters. That includes pop-ups in resorts and store remodels. (In a show of the company’s financial wherewithal, LVMH unveiled a seven-year, $900 million restoration of Paris’ iconic La Samaritaine department store last month.)
LVMH’s blockbuster start to 2021 given the slow recovery of international travel. But well-heeled Chinese shoppers—who pre-COVID would flock to London, Paris, and New York—are shopping more at home and online. And with international travel resuming and Europe’s re-opening accelerating, LVMH’s is expecting a strong second half to the year as well. “LVMH is in an excellent position to continue to grow and further strengthen our lead in the global luxury market in 2021,” said Arnault.
Subscribe to Fortune Daily to get essential business stories straight to your inbox each morning.
