Image courtesy: lvmh.com
Were the luxury industry predictions of doom and gloom overstated? After recent positive results from Richemont, LVMH – the conglomerate home to Louis Vuitton, Dior, Tiffany, and 70+ others – reported its 2024 full-year financial results with revenues of €84.7 billion. Presentation documents called it a “solid performance despite an unfavorable global economic environment” as LVMH reported 2024 revenue growth up 1% (on an organic basis) over 2023. Q4 revenues also rose 1% over the same period in 2023.
Read: Cartier and Van Cleef & Arpels Jewelry Sales Propel Richemont Fiscal Q3 Result Up 10%
During the LVMH investor call, CEO Bernard Arnault termed 2024 “robust” despite challenges. He expressed confidence for 2025 based on January results thus far, hinting at double-digit improvement.
LVMH’s largest division – Fashion & Leather Goods – was down 1% compared to 2023 (on a constant exchange basis), but improved in Q4, down just 1% (compared to -5% in Q3). These Q4 results beat market expectations of a 3.3% decline.
Neverfull Inside Out. Image courtesy @tamara
Arnault stated that Fashion & Leather Goods fared well in 2024. He pointed to the many major events such as the sponsorship of the Paris 2024 Olympics, the opening of the new NYC Flagship store, and new leather designs such as the Neverfull Inside Out, Low Key, and Speedy P9.
Speaking about Louis Vuitton, Arnault emphasized that “Louis Vuitton is not a fashion brand,” explaining that it makes leather goods and is an expert in travel. A “poetry Maison” – according to the translation of his words. He also pointed out that he introduced fashion to the brand in the 1990s.
Low Key Hobo. Image courtesy @laurajadestone
In response to a question about pricing, Arnault warned that it’s necessary to be very careful with prices as customers consider value beyond price. He emphasized that brands must be able to justify price increases with, for example, better quality, finish, and materials. Perhaps a subtle swipe at Chanel, Arnault criticized Houses that increased prices in an “extravagant manner” – like 15% – which he said didn’t make sense.
Image courtesy @web.cloud
Results for the remaining LVMH business lines were mixed. Again, the Wine & Spirits business continues to be a drag, posting -8% in comparison to 2023. Perfumes & Cosmetics revenues rose 4% in 2024 and Selective Retailing (which includes Sephora and DFS) was up 6%. Regarding the latter, LVMH indicated that Sephora was doing very well, although it declined to provide specific numbers.
The Watches & Jewelry division revenues declined 2% on an organic basis in 2024, despite positive results in Q4. Asked about Tiffany, whether the investment was worth it, Arnault said “Tiffany was a sleeping beauty for 10 years before” the deal and that LMVH decided to wake her up.
LVMH speaks of its geographic mix as balanced. Like 2023, Europe and the US represented 25% of overall revenues. Asia (not including Japan) showed weakness, unsurprisingly, as revenues declined from 31% to 28%. Much of this was picked up by sales in Japan due to the decline in its currency value, leading many to shop there instead. CFO Jean-Jacques Guiony stated that this balance allows LVMH to be covered if one geographic area has problems. However, he noted that it is important that all brands have a balanced presence in all areas.
Tell us, do you think the future for luxury goods is bright in 2025? Or are you taking a pause?
Love, PurseBop
XO
Updated: January 28th, 2025
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