The French group, which last year bought Italian jeweller Bulgari, brushed off concerns about the global economy with a 22 percent rise in 2011 profit from recurring operations to 5.26 billion euros (4.38 billion pounds) on sales up 16 percent at 23.66 billion euros.
It was expected to achieve profit of 5.1 billion euros on revenue of 23.3 billion euros, according to Thomson Reuters I/B/E/S estimates.
LVMH said that despite an uncertain economic environment in Europe it enters 2012 with confidence, adding that it planned to increase the dividend to shareholders paid on last year's results by 24 percent.
Chief Executive Bernard Arnault said business trends in January had been the same as at the end of last year, adding that the company's priority remained organic growth, with acquisitions the exception.
The luxury industry has been on tenterhooks in recent months over worries that Europe's long-running debt crisis could trigger an economic slowdown in emerging markets like China, where runaway demand for high-end goods has offset weaker trends in the U.S. and Europe.
LVMH saw the fastest growth in profit last year at its watches and jewellery business. The purchase of Bulgari doubled the size of that division.
Executives at the Geneva watch fair last month suggested that strong demand from Asia was unlikely to make up for weakness in the U.S. and Europe, with growth seen slowing from the record level achieved last year.
LVMH's fashion and leather goods unit saw profit rise by one-fifth, helped by double-digit revenue growth and exceptional profitability at the Louis Vuitton fashion brand, the group said.
Swiss luxury goods group Richemont
British luxury brand Burberry
LVMH, which took the luxury world by surprise in late 2010 by announcing it had built a stake in Hermes, said in December its holding had risen to 22.3 percent though it repeated it did not want to buy the maker of Kelly handbags and silk scarves.
Hermes family shareholders have responded by creating a majority holding to shield it from the threat of a takeover.
Shares in LVMH are up almost 16 percent so far this year.
(Reporting by James Regan and Pascale Denis; Editing by Leila Abboud and Elaine Hardcastle)