LVMH, the renowned French luxury conglomerate, has reported a decline in financial performance for the first half of 2024. The group’s revenue for this period reached €41.7 billion, marking a 1% decrease compared to the previous year.
- Profit from recurring operations fell by 8% to €10.6 billion, while the net profit share dropped by 14% to €7.3 billion.
- Regional performance varied, with growth in Europe, the US, and Japan, but diminished demand in China impacted overall results.
- LVMH’s fashion and leather goods, perfumes and cosmetics, and selective retailing sectors saw slight increases, while watches, jewelry, wine, and spirits declined.
- Despite challenges, LVMH remains resilient, with strategic investments and creative momentum highlighted by key brands like Louis Vuitton and Christian Dior.
LVMH, a leading figure in the luxury industry, reported revenues of €41.7 billion for the first six months of 2024, reflecting a 1% decline from the previous year. The decrease illustrates the ongoing slowdown in the luxury market.
The group’s profit from recurring operations decreased by 8% year-on-year, totaling €10.6 billion. Moreover, the net profit share saw a more significant drop of 14%, amounting to €7.3 billion. This downturn highlights the challenges LVMH faces in the current economic climate.
In terms of regional performance, LVMH observed growth within Europe and the United States on a consistent consolidation scope and currency basis. Japan experienced double-digit revenue growth, whereas the rest of Asia showed strong spending growth by Chinese customers in Europe and Japan, but experienced a lack of demand domestically in China.
From an organic growth perspective, the company achieved a modest 2% increase compared to the same period in 2023. Sectors such as fashion and leather goods, and perfumes and cosmetics saw minor upturns of 1% and 6% respectively, while the selective retailing sector increased by 8%. However, the watches and jewelry, along with wine and spirits categories, declined by 3% and 9%, respectively.
Despite the declines, there are elements of success; Louis Vuitton maintained a strong start to the year, powered by its high-quality strategy. Christian Dior continued to exhibit creative prowess, as evidenced by the appeal of collections from directors Maria Grazia Chiuri and Kim Jones. Additionally, Celine benefited from the popularity of its ‘Triomphe’ line, attributing to increased demand for its accessories.
Bernard Arnault, Chairman and CEO of LVMH, emphasized the company’s resilience and ongoing commitment to creativity and craftsmanship, especially in light of economic uncertainties. Arnault highlighted LVMH’s strategic focus on desirability and responsibility, alongside preparations for the Paris 2024 Olympic and Paralympic Games, as critical to maintaining global leadership in luxury goods for the remainder of the year.
LVMH’s financial outcome underscores the challenging landscape for luxury brands amidst economic uncertainties, yet showcases strategic strengths that may bolster future performance.
