Image courtesy: lvmh.com
Revenue growth continues to slow at luxury conglomerate LVMH – home to Louis Vuitton, Dior, Celine, Tiffany, and 70 other top brands. LVMH reported revenues for the first half (H1) of 2024 dipping one percent (1%) compared to H1 2023 a very strong growth period.
Second-quarter revenue growth fell to 1%, down from 3% in the first quarter of 2024. Overall revenue was €41.68 billion with profits dropping 14% in a year-over-year comparison for the period.
Read:
LVMH Reports SlowerRevenue Growth for 2024 Q1
LVMH Sales Revenues Continue to Rise in the First Half of 2023
Terming the results “good . . . despite the prevailing environment,” Bernard Arnault, Chairman and CEO of LVMH said:
The results for the first half of the year reflect LVMH’s remarkable resilience, backed by the strength of its Maisons and the responsiveness of its teams in a climate of economic and geopolitical uncertainty . . . While remaining vigilant in the current context, the Group approaches the second half of the year with confidence . . . “
As anticipated, sales in China (known as Asia not including Japan) are down 10%, but, according to LVMH, that doesn’t tell the complete story about the Chinese customer. Revenue in Japan is up 44% for the first six months of 2024, with a 57% jump in just Q2, as the weak yen has Chinese mainlanders (and others) flocking to Japan for luxury shopping. China’s proportion of revenue was 30% down from 34% in H1 2023 while Japan’s increased to 9% from 7%.
Sales revenues in Europe and the United States remain roughly the same on an organic basis, with increases of 3% and 2%, respectively over the same period of 2023. Europe’s share of overall revenues (not including France) was 16% (up year over year from 15%) and France remained steady at 8%. The United States accounted for 25% of revenues, up 1% from H1 2023.
According to LVMH CFO Jean Jacques Guiony, all business divisions except Wine & Spirits and Watches &Jewelry experienced growth. At the financial presentation, Guiony remarked about the “resilience” in Fashion & Leather Goods (FLG). FLG is LVMH’s largest business line representing nearly half of the company’s overall revenues, and it reported organic growth of 1% (-2% on a reported basis) over the first half of 2023. Negative impact from currency and other matters was -3%.
LMVH does not break down financial information by brand, but Guiony did address some brand-specific matters. He confirmed that Louis Vuitton prices have increased 2-3% over the last few weeks, pointing to the last global increased in around February 2023.
Regarding the recent reports about supplier problems for Dior in Italy, Guiony said LVMH accepts full responsibility but had no idea of the situation or what happened with the supplier. It is accelerating its work toward vertical integration and control of suppliers.
Image courtesy: AP
Guiony made no predictions for H2 financial results, or whether he was optimistic or pessimistic, claiming visibility was limited – and only as good as the last quarter’s result. However, he did remark that the year-over-year comparison basis for H2 would be much easier. LVMH efforts would continue to attract new clients as well as take care of the existing clientele.
Were you surprised by these results? Tell us whether and how your luxury purchasing has changed.
Love, PurseBop
Updated: July 24th, 2024
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