The French luxury conglomerate LVMH has reported a marginal decline in its financial performance for the first half of 2024, amidst a broader industry slowdown. Despite slight growth in certain sectors, significant challenges remain.
LVMH, the renowned global luxury leader, experienced a 1% decline in its total revenues, amassing €41.7 billion for the first semester of 2024. Concurrently, profits from recurring operations fell by 8% to €10.6 billion. Such results indicate the ongoing pressures affecting the luxury market.
Group share of net profit dropped 14%, reaching €7.3 billion. The profitability challenges emphasise the critical need for strategic adjustments to counterbalance external economic and geopolitical uncertainties.
Europe and the US showcased resilience with growth achieved on a consistent consolidation scope and currency basis, while Japan reported robust double-digit revenue growth. However, the rest of Asia faced subdued demand, primarily due to diminished spending in China.
LVMH acknowledged the vital role of Chinese consumer spending in driving growth across other regions, underlining the unpredictable nature of the Asian market.
The increase in organic revenue by 2% is notable, although it does little to offset the broader challenges in these key markets.
Fashion and leather goods grew by 1%, perfumes and cosmetics by 6%, and selective retailing by 8%. However, not all sectors fared well.
Watches and jewellery saw a 3% decline, while the wine and spirits sector fell by 9%. These figures reflect varied consumer trends and demand fluctuations across luxury product categories.
In fashion and leather goods, despite the challenging market, LVMH capitalised on high-quality offerings, particularly with Christian Dior and Louis Vuitton, which remained popular among consumers.
Louis Vuitton initiated the year strongly, buoyed by its high-quality strategy that continues to resonate with luxury buyers. Christian Dior maintained creative momentum, driving brand desirability through innovative collections.
Celine recorded increased demand for its accessories, particularly from the Triomphe line. This demonstrates the brand’s ability to align with current fashion trends and consumer preferences.
In response to financial pressures, LVMH announced an interim dividend of €5.50 per share, payable in December. This reflects the group’s ongoing commitment to delivering shareholder value amidst difficult economic conditions.
LVMH’s approach underscores the importance of maintaining investor confidence through consistent returns, despite market challenges.
Bernard Arnault, LVMH’s Chairman and CEO, highlighted the conglomerate’s resilience amidst economic and geopolitical pressures. Arnault attributes success to the strength of their maisons and the agile response of their teams.
Arnault emphasised a continued focus on creativity and responsibility, particularly in light of LVMH’s partnership with the 2024 Paris Olympic Games.
LVMH remains optimistic about reinforcing its leadership in luxury goods for the latter half of 2024, leveraging team talent and strategic agility.
This positive outlook, despite current setbacks, underscores LVMH’s confidence in its long-term growth trajectory.
The first half of 2024 presented challenges for LVMH, reflecting broader luxury market dynamics. With strategic initiatives and resilient performance in select markets, the group remains poised for recovery.
