Following yesterday’s release of LVMH’s figures for the the year ending 31 December 2024; Louise Deglise-Favre, senior apparel analyst at GlobalData, a leading data and analytics company, offers her view: “LVMH’s results beat expectations in the fourth quarter, with sales remaining flat on the year, bringing FY2024 sales to a minor decline of 1.7% to €84.7bn, which is a significant improvement compared to the 3.5% decline it reported in the nine months to September. This is similar to the trend seen at Richemont, which surprised the market with sales growth of 10.0% for its Q3 ending in December, indicating that the worst of the luxury slowdown might be over as macroeconomic and geopolitical issues start to subside. While LVMH has not provided tangible guidance for FY2025, CEO Bernard Arnault has claimed that he is very confident, and that the year has got off to a good start, citing double digit growth in January for some of the group’s main brands such as Louis Vuitton and Tiffany.
“In FY2024, Japan majorly outperformed, experiencing organic growth of 28%, although this was mainly driven by the weakness of the Yen attracting tourists looking to take advantage of the favorable exchange rates and buy luxury goods for less. Europe and the US saw organic sales rise 3% and 2% respectively, helped by the easing of inflation. Asia excluding Japan remained the dark cloud in LVMH’s sky, with organic revenue falling 11%, remaining hindered by China’s sluggish economy. However, the stimulus payments introduced by the Chinese government in September 2024 seem to have helped as Q4 showed signs of improvement, with sales falling 10% compared to 16% in Q3.
“The conglomerate’s largest division, Fashion & Leather Goods, declined 2.6% to €41.1bn for the full year. Within the division, its flagship brands Dior and Louis Vuitton outperformed, with Arnault stating that the former experienced the best performance within the division. The gradual improvement of consumers’ finances will likely lead to a bounce back among some aspirational shoppers in 2025, especially within Gen Z as brands continue to gear their offerings and marketing towards this demographic. The Selective Retailing and Perfumes and Cosmetics divisions both grew in 2024, with sales rising 2.1% and 1.8% respectively, driven by the enduring demand for premium and luxury beauty. Notably, Sephora (which sits within Selective Retailing) delivered double digit growth, thanks in part to its store expansion, especially in the UK where it opened five new stores throughout the year. LVMH’s Wine & Spirits division performed the worst, with sales falling 11.2%, hit by a slowdown in demand for champagne and cognac, especially from Chinese consumers being cautious with their spending amid economic difficulties.”
