LVMH slows down in third quarter 2024

On Tuesday, 15 October, the world's leading luxury goods group published its figures for the third quarter of 2024 and for the first nine months of the year. LVMH reported a 3% fall in organic sales for the last three months. Rising prices and the vagaries of the global economic situation have slowed down buyers, particularly in China.

Third-quarter sales came to €19.08 billion, compared with the €19.96 billion reported at the end of the same period in 2023. These results are below the figures forecast by Barclays analysts, who were expecting organic growth of 2%.

For the first nine months of the year, LVMH also suffered a decline of -2%, with total sales of €60.75 billion. There are several possible reasons for this: the recent rise in the yen in Japan has reduced consumption of top-of-the-range products in the country, China is slowing down, Europe is still destabilised by its geopolitical situation, with two major conflicts underway, and finally, the comparison with the euphoria of the post-covid years is weighing on the percentages.

This is how analysts explain the mixed results and weakening of the Arnault family's luxury goods empire. According to the estimates of most consultancies, the situation should improve in 2025, with the return of confidence in the Chinese market, once the huge property crisis affecting the country has passed.

Several divisions are in decline, starting with wines and spirits, which recorded an organic fall of 8% over nine months. Cognacs continue to suffer (-11%), this time impacted by the fall in consumption in China, and champagnes remain in the red at -6%. It is interesting to note the strategic partnership with French Bloom, which produces non-alcoholic sparkling wines, the winning segment of current trends.

Fashion and leather goods declined by -5% in the third quarter, mainly due to a slight drop in sales at Louis Vuitton and Dior. LVMH notes a slight improvement in the US and European markets. In his analysis of the results, Jean-Jacques Guiony, LVMH's CFO, notes the strong desirability of the Loewe brand and the performance of the Loro Piana brand in all categories.

In the press release published by LVMH on Tuesday, the group remains positive and highlights, for the watches and jewellery business (down -4% in the third half), the reception received by the Tiffany by Pharrel Williams collection.

One of the best-performing activities was perfumes and cosmetics: the first nine months of 2024 saw organic sales growth of +5%. LVMH explains this growth through the solid innovation strategy implemented by the brands, such as the exceptional new Guerlain collections and the solid growth in Christian Dior make-up.

Selective Retailing recorded growth of +6% over the first nine months of the year, due in part to market share gains in the United States, the good performance of Sephora, and the continued positive trend at Le Bon Marché.