LVMH posted subdued quarterly results due to continued weakness in the fashion and leather goods segment. The results slightly exceeded analysts’ estimates for overall performance.
The French luxury goods conglomerate’s American Depositary Receipts (ADRs) slumped 8.5% in the US following the results. However, LVMH’s shares have risen by 18% this year in European markets, driven by optimism surrounding an improved macroeconomic environment and strong earnings from rival Richemont.
Earnings Highlights
In the fourth quarter, total revenue rose by 1% year on year to €23.93 billion. This figure represents a 25% jump from the third quarter, when LVMH posted its first year-on-year decline since the pandemic. Full-year organic sales revenue increased by 1% in 2024 to €84.68bn, surpassing analysts’ expectations of a 2% decline.
However, profit from recurring operations fell by 14% year on year, despite a 5% reduction in marketing expenses. Free cash flow rose 29% annually to €10.5bn.
LVMH stated that all key regions, including Europe, the US, and Japan, saw sales growth, adding that the rest of Asia “reflected the strong growth in spending by Chinese customers in Europe and Japan”.
Among its business segments, its largest revenue contributor – fashion and leather goods, which includes Louis Vuitton and Christian Dior – recorded a 1% annual decline, while wine and spirits slumped by 8% during the fourth quarter. However, perfumes and cosmetics posted a modest 2% increase from 2023.
Revenue in the watches and jewellery segment, which includes brands such as Bulgari and Tiffany, rose by 2%. All figures are organic, based on a constant consolidation scope and currency basis. On a reported basis, overall revenue declined by 2%, with the company citing: “Exchange rate fluctuations had a substantial negative impact during the year, particularly on Fashion & Leather Goods and Wines & Spirits.”
CEO Bernard Arnault commented: “In 2024, amid an uncertain environment, LVMH showed strong resilience.” He added: “We enter 2025 with confidence.” During the earnings call, Arnault noted that 2025 had started relatively well, with Louis Vuitton posting double-digit growth so far.
The company will propose a dividend of €13 per share, with €5.5 per share already paid on 4 December 2024. The balance of €7.5 per share will be paid on 28 April, pending the decision in the shareholder’s meeting on 17 April.
Uneven recovery in the luxury goods sector
As the world’s largest luxury goods retailer, LVMH’s earnings reflect an uneven recovery across the sector. In 2024, the company faced growth challenges due to weakened Chinese consumer demand. The slowdown also reflects a base effect following the post-pandemic sales surge in 2023.
LVMH’s results contrast sharply with Richemont’s strong earnings, which saw record quarterly sales driven by robust demand in its jewellery segment. The Swiss luxury goods company, which owns brands such as Cartier and Van Cleef & Arpels, reported a 10% increase in total sales in the quarter. This suggests that consumers currently favour hard luxury goods, such as jewellery and watches, over soft luxury items like leather bags and clothing.
Last week, British luxury retailer Burberry reported a slower-than-expected sales decline in the December quarter, which led to a surge in its share price. The results showed subdued sales in the Asia-Pacific and EMEA regions, while sales in the US ticked up, reflecting the broader macroeconomic impact on the luxury sector.
