On Tuesday, the LVMH group posted results for the first quarter of 2024 that were well below the double-digit growth seen previously. The geopolitical context and the normalisation of the Chinese market are the main reasons for this.
This year is shaping up to be a difficult one for the luxury goods sector, and the first-quarter sales results of the world's leading luxury brand are in line with expectations. While during the same period the group posted very strong organic growth of +17%, the CFO, , Jean-Jacques Guiony, has announced a timid +3% for the first quarter of 2024, with sales of €20.7 billion.
Having benefited from the dynamism of the Chinese market, which had previously been paralysed by the global pandemic, the luxury group is now facing a market on the way to normalisation, which explains the subdued financial results. In contrast, Japan has become one of the group's driving markets, with double-digit sales growth.
Despite a tense geopolitical context, LVMH succeeded in maintaining a slightly higher level of sales overall. Fashion and Leather Goods, the Group's flagship sector, climbed by 2% in the first quarter. Perfumes and Cosmetics proved to be more dynamic, with sales up by +7%. A segment which was already buoyant in 2023.
Among the strongest brands are Christian Dior, which is consolidating its success on two essential points: a constantly innovative approach and the unshakeable appeal of three fragrances - J'adore, Sauvage and Miss Dior. Givenchy has also developed its own fragrance, L'interdit, while Guerlain has captured the public's attention with a new version of its Aqua Allegoria perfume and iconic cosmetics such as the Terracotta line.
Sales were below the forecasts of financial analysts Factset, which was counting on €21 billion, while Bloomberg was even more optimistic, expecting €21.18 billion. This slight fall, explained in part by the many investments made by the companies concerned, also affected the Watches and Jewellery sector, which saw an organic decline of 2%. Tiffany is aiming to strengthen the brand's desirability and global roll-out, while Bulgari is pursuing the same path, diversifying its activities to further boost its positioning. The Italian fine jewellery house recently inaugurated its Foundation.
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