LVMH, the French luxury conglomerate, reported a 1% decrease in revenues for the first half of 2024, highlighting a luxury market slowdown.
- The group’s profit from recurring operations fell by 8%, amounting to €10.6bn, with net profits decreasing by 14% to €7.3bn.
- Despite growth in Europe and the US, LVMH faced challenges in the Chinese market, although Japan showed strong performance.
- Fashion, leather goods, perfumes, and selective retailing saw marginal organic growth, while watches and jewellery sectors declined.
- Bernard Arnault, LVMH CEO, attributes resilience to brand strength and strategy amid economic uncertainty and remains optimistic.
LVMH, a leading name in the luxury industry, experienced a revenue decline of 1% during the first six months of 2024. This reflects the ongoing slowdown in the luxury market. The company reported revenues of €41.7bn (£35.1bn). The profit from recurring operations also faced an 8% downturn, reducing to €10.6bn (£8.9bn). The group’s share of net profit further diminished by 14%, settling at €7.3bn (£6.1bn).
Despite the overall decline, certain regions and sectors showed resilience. European and US markets achieved growth when adjusted for currency fluctuations, while Japan exhibited a notable double-digit revenue increase. However, growth was impeded by declining demand in China, despite strong spending by Chinese customers in Europe and Japan. Organic revenue growth stood at 2% compared to the same period in the previous year.
In terms of sector performance, the fashion and leather goods division experienced a marginal organic growth of 1%, amounting to €2.1bn (£1.8bn). The perfumes and cosmetics sectors showed a better performance with a 6% rise, reaching €4.1bn (£3.5bn). Selective retailing also grew by 8%, with revenues of €8.6bn (£7.2bn). Meanwhile, watches and jewellery, and wine and spirits sectors witnessed a decrease of 3% and 9% respectively.
Profit margins within the fashion and leather goods categories declined by 6% to €8.1bn (£6.8bn). Nevertheless, Louis Vuitton and Christian Dior maintained brand desirability through acclaimed creative strategies. The leather goods ‘Triomphe’ line by Celine witnessed growing demand, reflecting successful market positioning.
According to Bernard Arnault, the chairman and CEO, the results underline the group’s resilience, driven by its brands’ strength and agile team response under challenging economic and geopolitical conditions. LVMH plans to pay an interim dividend of €5.50/share (£4.63) on 4 December 2024, reflecting confidence in future prospects.
LVMH navigates economic challenges, leveraging its brand strength and strategic agility to maintain market leadership.
