LVMH published mid-year results for 2024 on July 23, showing growth but hit by the global slowdown in luxury goods sales. Net income fell by 14%, while sales rose by 1%.
Resilience for some, results below expectations for others, the fact remains that the LVMH group has published a disappointing fiscal year for the first six months of 2024 at 41.7 billion euros.
However, despite “a climate of economic and geopolitical uncertainties”, the Number One in Luxury Goods managed to avoid negative growth.
While the slowdown in sales is largely due to a still sluggish Chinese market, the French luxury group is benefiting from the exceptional vitality of the Japanese market.
Sluggish growth
After recording sales growth of +3% in the first quarter, LVMH achieved sluggish growth of 1% at constant exchange rates (2% organic) in the first half of 2024.
Published at the end of its second half-year, these results confirm the slowdown in growth seen in recent months for the number one luxury brand.
Rising sun shines brightly
The luxury group’s “remarkable resilience”, hailed by Chairman and CEO Bernard Arnault, is largely due to the exceptional dynamism of the Japanese market.
Sales in the country rose by +44% over the period!
The Group thus benefited froma record influx of tourists, particularly Chinese, attracted to the Japanese archipelago by a weak yen.
Despite the slowdown in China, Asia (excluding Japan) continues to play a robust role in the Group’s sales growth, accounting for 30%, four points less than at the same time last year.
Fashion and leather goods struggling
The Group has built both its reputation and its strength on its status as a diversified international group with multiple complementary divisions.
Atthe heart of the group’s reactor (more than half of operating income) and spearheading its profit margin, the fashion and leather goods division posted growth similar to that of the overall results (+1%). However, the Group points out that it has preserved its margins, particularly with its emblematic Maisons Louis Vuitton and Dior.
However, this weaker performance should be seen in the context of falling sales in watches and jewelry (-3%). The continued fall in wines and spirits (-9%) reflects the normalization of consumption that began in 2023.
Selective retailing, represented by Sephora (+8% ), and perfumes and cosmetics, led by the House of Dior (+6%), breathe new life into this bearish picture. These last solid elements seem to corroborate the strong potential of beauty and cosmetics, all the more so in an uncertain economic and geopolitical climate.
As apremium partner of the Paris 2024 Olympic and Paralympic Games, with the participation of the Berluti, Louis Vuitton and Chaumet Houses in particular, LVMH has just inaugurated its Paris HQ in the presence of its emblematic Chairman.
There’s no doubt that the second quarter should enable the group to revive its growth. As a sign of this likely upturn, the number one luxury goods group recently boasted a 100% occupancy rate over the Games period in its Paris hotels.
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Featured Photo: Louis Vuitton’s flagship, Tokyo © Louis Vuitton
