Image courtesy: lvmh.com
Often a bellwether of the luxury goods industry, Louis Vuitton Moet Hennessy (LVMH) reported its revenue results for 2024 Q3 and the first nine months – with its premier Fashion & Leather Goods group revenues down 5% in Q3 of this year over 2023 (on an organic basis), at €9,151 million compared to €9750 in Q3 of 2023. This group is responsible for nearly half of LVMH revenues from fashion brands like Louis Vuitton, Dior, Celine, Loewe, and Loro Piana.
On a consolidated basis, LVMH revenues were down 3% for Q3 and flat for the first nine months of 2024 in a year-over-year comparison. As point of reference, 2023 Q1 and Q2 were particularly strong, with 18% and 21% revenue growth, respectively, declining to 9% for the rest of the year.
Calling it “good resilience in a challenging environment” LVMH states that it
“remains confident and will maintain a strategy focused on continuously enhancing the desirability of its brands, drawing on the authenticity and quality of its products, excellence in distribution and agile organization.”
Image courtesy LVMH
The much smaller business lines of Perfume & Cosmetics and Selective Retailing were relatively bright spots showing single digit revenue increases for Q3 and the first nine months of 2024 although both showed slight declines in growth for Q3 over Q2. Wine & Spirits continued to be a drag on overall results declining 7% in Q3 (8% in the nine months), Watches & Jewelry also showed negative revenue change – down 4% for the quarter.
Geographically, Japan continues to see revenue growth although at a lower clip than in Q2 and H1, due in part to Chinese (and other) residents shopping there to take advantage of the devalued yen. Revenue there was up 20% over Q3 2023. LVMH claims the slight decline in overall revenue mainly arose from lower growth seen in Japan.
The US and Europe saw mild upticks, 1% and 3%. And China (called Asia minus Japan), despite hopes for a rebound in consumer demand, experienced a revenue growth decline of -16%.
China has been a continuing concern for the luxury industry as a whole. Demand has been affected by declining consumer confidence, even as the government introduced a series of stimulus measures to support the economy. Any effects from those initiatives come too late for Q3 results.
LVMH CEO Jean-Jacques Guiony was asked about the secondary luxury goods market in China and was emphatic that LVMH will never invest in “parallel products” calling discounting a “plague.” He said the company is strict on limiting as much as it can.
With LVMH reporting Q3 before many other luxury brands, the question is whether its results – particularly in Fashion & Leather Goods – will be replicated by others in the sector. Kering (parent of Gucci, Bottega Veneta, and others) reports revenues on October 22. Hermès results are due October 24, as we await whether it once again bucks the luxury trend.
Do you think the decline in demand for LVMH fashion products is due to economic reasons? Or is brand or design related? Let us know.
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Updated: October 15th, 2024
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