French luxury giant LVMH reports a slight decline in revenue and a notable decrease in profits for the first six months of 2024, reflecting broader economic challenges.
- LVMH’s revenue reached €41.7bn, marking a 1% year-on-year decline, amidst the continuing luxury market slowdown.
- Profits from recurring operations at the group diminished by 8% to €10.6bn, with net profits dropping 14% to €7.3bn.
- Despite challenges, Europe and the US markets grew, and Japan achieved double-digit growth, offsetting weaker Chinese demand.
- Fashion, leather goods, perfumes, and cosmetics sectors recorded modest growth, highlighting LVMH’s diversified strength.
For the first half of 2024, LVMH recorded revenues of €41.7bn, representing a slight 1% decline compared to the previous year. This was attributed to the ongoing slowdown within the luxury segment. Profits from recurring operations fell by 8% to €10.6bn, while the group’s net profit saw a 14% drop to €7.3bn.
Market performance varied considerably by region. While Europe and the United States demonstrated growth on a constant consolidation scope and currency basis, Japan stood out with double-digit revenue growth. However, weak demand in China impacted overall Asian revenue, although increased spending by Chinese tourists in Europe and Japan offered some compensation.
In terms of organic growth, LVMH experienced a 2% rise when compared with the first half of 2023. Though fashion and leather goods only grew organically by 1% to €2.1bn, perfumes and cosmetics saw a healthier increase of 6% to €4.1bn, and selective retailing grew by 8% to €8.6bn.
Several product categories underperformed. Watches and jewellery, along with wine and spirits, saw declines of 3% and 9% respectively. Within fashion and leather goods, profits from recurring operations decreased by 6% to €8.1bn. Yet, brands like Louis Vuitton and Christian Dior maintained momentum through their high-quality strategies and desirable collections.
Chairman and CEO Bernard Arnault highlighted LVMH’s resilience and adaptability amidst economic and geopolitical uncertainty. He noted the group’s strategic focus on desirability and responsibility, aiming to uphold its leadership in the luxury sector. Arnault expressed confidence about the future, acknowledging the contribution of LVMH’s teams in maintaining the group’s strength.
LVMH remains confident, driven by strategic focus and adaptability, despite short-term profit challenges.
