LVMH recorded moderate growth in the fourth quarter of 2024, but the figures show that the sector is not quite out of the doldrums yet. Even if Bernard Arnault is eyeing up the United States.
Modest growth and dwindling profits
The fourth quarter totalled a turnover of 23.9 billion euros, meaning organic revenue growth of 1%. This was better than expected, since analysts had forecast a contraction of 1.25%. For the full year 2024, growth was also 1%, representing total sales of 84.7 billion euros. However, after adjusting for exchange rates, total revenues were down by 2%.
Operating profit fell by 14% to 19.6 billion euros, while net profit fell by 17% to 12.3 billion euros. Sales in the fashion and leather goods division, which accounts for half of the group’s turnover, fell by 1%, while the watch and jewellery division recorded a 2% contraction in sales. The wines and spirits division recorded the biggest fall, down 11%.
Retail was a notable bright spot: the division comprising Sephora and Le Bon Marché recorded organic sales growth of 6%. The Sephora cosmetics chain even recorded double-digit growth, both in terms of sales and profits, although the group does not specify exact figures.
Worries in China persist
The quarterly figures suggest that the market is stabilising, but the annual results underline that the sector remains under pressure. In particular, the weakness of the Chinese market remains a cause for concern. Sales of luxury goods in China fell by 20% in 2024, the biggest drop since 2011.
However, LVMH CEO Bernard Arnault remains optimistic about growth opportunities in the US, where the economy is showing resilience and tax breaks are driving expansion. The presence of the Arnault family at Donald Trump’s inauguration underlines the strategic importance of the US market, which is becoming increasingly vital as growth in China falters.
For 2025, LVMH remains cautiously positive, despite what Arnault calls “a more delicate conjuncture”. No concrete forecasts have been issued, but positive signs in the fourth quarter point to a possible recovery. Meanwhile, the group is also cleaning up its brand portfolio: designer Stella McCartney is buying back her minority stake, as the group announced yesterday.
