The French luxury goods giant announced on Wednesday its intention to buy back up to 1.5 billion euros worth of shares, with a view to cancelling them, a strategy that is popular with large groups that have posted record profits.

"As part of its share buyback programme, LVMH Moët Hennessy Louis Vuitton S.E. (LVMH) today entrusted an investment services provider with a mandate to acquire its own shares for a maximum amount of one billion five hundred million euros," the group said in a brief statement.

The buyback period will run until July 20 and "the shares thus bought back are intended to be cancelled", LVMH said without giving further details.

Share buybacks are "extremely popular with shareholders," Quincy Krosby of US asset manager LPL Financial told AFP. "Typically, the immediate reaction is that the share price goes up." In practical terms, by reducing the number of shares, the cancellation operation strengthens the share of existing shareholders.

LVMH is 41% owned by the Arnault family's intermediate holding company, Christian Dior SE.

At around 9.35am, LVMH shares were up 1.75% at 802.70 euros, in a market up 0.26%.

By 2022, share buybacks have almost doubled from 2021, according to a BNP Paribas report, to some 161 billion euros in 11 European countries.

The world's number one luxury goods company set new records in 2022, with sales of nearly €80 billion and profits soaring to €14 billion (+17%).

LVMH, which paid €5 billion in corporate taxes worldwide, will pay €400 million in profit-sharing to its 39,000 French employees and €12 per share for 2022. A total of some 6 billion euros, of which nearly 3 billion euros will go to the family of CEO Bernard Arnault.

According to asset manager Janus Henderson, LVMH has become the second largest French dividend payer in 2022, after TotalEnergies.