LVMH 2024 Financial Results
All eyes were on Paris this week – while most people focused on the Haute Couture shows, there was another important event – maybe it is not as “exciting” as all the garments.
LVMH, one of the biggest fashion conglomerates in the world, released their results for 2024. Why is it so important? Because it gives us an idea about the current state of luxury.
For months there are talks about a potential “downfall of luxury”; some go even as far and claim “luxury is dead”. There has been a downward development in the luxury market since the middle of 2024 and with the most recent results, it is possible to assess where the market may be headed. Q4, the last quarter of the year, is usually the strongest in retail and it may give us clues about what we can expect not only from LVMH but fashion and luxury overall in the coming months. Are the LVMH financial results a hint at a potential “downfall” in the luxury segment overall? Let’s have a look – and do not worry, this article is for everyone – whether you are familiar with the financial markets overall or LVMH in particular or if you want to learn more about the fashion business and its financial dimension.
You can also watch my video here:
Brief Overview of LVMH
Louis Vuitton Moet Hennessy (LVMH) is France’s powerhouse, a conglomerate run by the Arnault family – Bernard Arnault and his family are frequently ranking at the top of the richest people in the world list. At the time of publishing this article, Mr. Arnault ranked 5th on the Forbes ranking. The conglomerate owns a wide range of brands – most people think about fashion – Louis Vuitton, as the name suggests, but also Dior, for example. But LVMH also covers further areas, in total, they structure their company along five groups: Wines & Spirits, Fashion & Leather Goods, Watches & Jewelry, Perfumes & Cosmetics and Selective Retailing. The group published their Annual Results for 2024 on 28 January 2025 and also broadcast the meeting via a livestream on their website.
Overview of Mr Arnault’s Statement
Before the results were published, some investors had high expectations for the LVMH performance. According to some experts, among them Luca Solca of Bernstein, these expectations were due to the most recent positive results published by Richemont, a competitor to LVMH, especially in the jewellery segment where it owns brands like Cartier and Van Cleef & Arpels. While the LVMH results exceeded expectations by analysts in some areas, they did not meet these higher expectations fueled by the Richemont results. The day after the LVMH released their results, the stock dropped by about 5%.
In his statement, Mr Arnault called 2024 a “robust year”, “une année solide”, despite the challenging environment, he also added that 2025 has already started very promisingly without giving any details. Furthermore, he added that there were weaknesses in Asia, there was uncertainty in America because of the election year and Europe did quite well. He added that Fashion & Leather Goods “did well” – please see the analysis for the segment below. A big issue was DFS, a global luxury retailer based in Hong Kong with locations mainly in airports and downtown areas. According to Mr Arnault, it faces challenges because of its location – at the moment, it is not really attractive for shoppers from Mainland China to go to Hong Kong and Macau.
The LVMH CEO explained the drop in Recurring Operating Income of the group with one-time events sponsored by the group, such as the Olympic Games, which incurred substantial costs.
Let’s look into the numbers.
Financial Results for 2024
Revenue
In 2024, LVMH’s group revenue was EUR 84.683 billion, compared to EUR 86.153 billion in 2023.
According to LVMH, this is a 1% increase. How is this possible? Just by applying basic maths, we see that this is actually a decrease. This is how LVMH explained the “increase”: According to them, revenue grew organically by 1% and then due to exchange rate fluctuations it decreased by -2% and the impact of changes in the scope of consolidation was -1%. In general, “organic growth” refers to the growth a company can achieve by increasing output and higher sales internally. This means through its own resources, not by external activities such as mergers or acquisition. In their presentation, LVMH focuses on the organic growth, this is why they see “continued growth” of their revenue despite the lower number of EUR 84.683 billion.
Let’s take a closer look at the segments.
Revenue Per Segment
As we have already seen in Q3 of 2024, at first sight, we immediately notice the “big” negative movements in the Wines & Spirits segment. A negative trend is never good, but we need to look at each segment and determine how big is the “pie”. This is simple math: for example, 1% from a smaller pie is smaller in absolute numbers than 1% from a bigger pie. In the case of LVMH, we think of a big conglomerate. When going through all the brands, we may believe that the company is very diversified. But at a closer look, we see that the major driver of the group’s business is one segment: Fashion & Leather Goods which generated about EUR 41 billion in sales in 2024, almost half of the group’s total sales. Therefore, the conglomerate is not as diversified as it may seem at first sight.
What does that mean? Usually, diversification can help to overcome difficult times – if one segment is not doing too well, another one may balance it out. Being less diversified may offer advantages, for example, it allows to focus on one particular product or industry. But this also means that the company will be more vulnerable, if negative developments happen in that particular segment or industry.
Therefore, we need to look into the development of the Fashion & Leather Goods Segment.
Fashion & Leather Goods
The year started out with little growth (2% in Q1 2024, 1% in Q2 2024 compared to the same periods in 2023) and it showed -5%, negative growth in Q3 compared to the previous year. It recovered a bit in Q4 with only -1% growth. Overall, the segment showed -1% growth for the whole year of 2024. “Negative growth” regarding sales simply means that less revenue was generate. In absolute numbers, we are talking about ca. EUR 1.1 billion less. As mentioned above, Mr Arnault said in his statement that Fashion & Leather Goods “did well”, Mr Guiony, the group CFO, called it “stable”. If we look at it from the percentage perspective, it is only -1%; some analysts expected -3%. Nevertheless, it should not be because it hints at a trend which already started in 2023 where growth went from positive double digits in the first half of the year, to 9% in Q3 2023 and since then, it has steadily decreased (even in the negative digits) with the exception of Q4 2024 where the negative growth was “only” -1%.
While a lot of journalists were surprised by the results, especially for Q3 2024, it actually was not a sudden event – the trend could already be seen since the beginning of 2023 – when growth was still in the positive double digits and fell to +9% in Q3 2023. This is still positive growth, but quarter by quarter, growth decreased. A similar trend could also be seen in the Watches & Jewelry segment – with an exception in the last quarter where sales grew by 3%. In this matter, Mr Guiony attributed the positive momentum to Tiffany’s which the group acquired in 2021.
It is difficult to determine the reasons from the outside and we mainly rely on the reasons given by LVMH.
Overall Economic Climate
I would assume that it reflects overall economic trends – many countries face challenging times – inflation, rising energy prices, living costs, prices of daily goods have increased. This leads to less spending for goods which are not absolutely “necessary”. This especially affects the so-called “aspirational customers”. These strongly identify with a brand, they may not be able to spend as much as the “super customers” but they may save for certain goods from a brand – small leather goods, branded scarves, bags, or even cosmetics or nail polish – to also “buy a part of the brand”. In recent years, I have observed a big focus of many luxury brands on this customer segment. The most obvious examples in the industry are probably Louis Vuitton, Dior and Gucci – the latter is part of the Kering Group. You may have observed this too: Louis Vuitton bags have become almost ubiquitous. And this was the strategy – to also get the aspirational customers to buy into the brand. This worked for quite some time – on the one hand, a lot of people in Europe and America discovered the brand, then there was also the development of the Chinese market. And maybe the strategy was “if I can sell one bag to thousands of people, I make more money than focusing on the very few people who can afford the most expensive products like Couture garments”. But if there is a more difficult economic climate, the aspirational customers are most likely those who stop buying first. Furthermore, the risk is that the “core” customers, the big spenders, get alienated – if you have a lot of money, do you really want to have the same things as everyone else? Probably not. But this is just my personal opinion.
Asia – The China Question
For the longest time, it felt as if the Chinese market was the “holy grail” for luxury brands. It was fairly “easy” to grow – the market just developed, Chinese people discovered foreign brands and because they were new and exciting, they wanted to buy them. It was prestigious to own products by foreign brands. However, the overall economic climate leads to people spending less on luxury goods. Mr Arnault taught about the current market environment but mentioned that he thinks that the Chinese economy will slowly recover within 2 years. At this point in time I would say we have to wait and see as the economic reality is very uncertain.
There may be another dimension to the developments in China which is not necessarily linked to the economic climate itself: There may have been a change in taste or preferences by the Chinese consumers. As mentioned before, in the beginning, foreign brands were exciting but it is likely that also Chinese consumers got a bit tired of them after some time. This may be due to the fact that some foreign brands lacked understanding for the local market and failed to adapt to the local taste. Ultimately, it may also be the same as in Europe and America – if you see certain brands and products everywhere, maybe they are not as interesting anymore. The affluent Chinese shoppers are seeking different types of luxury – products have to come up to certain standards, consumers have moved beyond mere logos.
This focus on experiences may still less significant than in other countries, such as Europe or America, but it is getting more important. In my opinion, the luxury fashion industry should rethink their approach – not just in the very long-run; maybe it could take inspiration from the luxury travel industry.
Lastly, another important factor may also the big push within the country for local products. Chinese people have become prouder about their own brands and this is also pushed by the government. It may not be as visible yet, but this, in the long-run, may also affect consumer behaviour. I find this very interesting, a similar question related to this link to experiences was raised during the livestream (However, the analyst assumed it was less important than in other countries). This question was not answered by Mr Arnault and his team.
In 2024, there was a lot of talk about the growth in Japan – I covered this in my previous video about the Q3 results. The overall narrative was that the decrease in revenue from China may be due to the fact that Chinese travelled to other countries, especially Japan because of the exchange rate benefits, and shopped there. When the Q3 results where published, I looked at the absolute numbers – again I used my pie analogy – some of the sales may have been due to this scenario, but this could not balance out the losses from China.
The numbers for 2024 also confirm this – the loss in Asia excluding Japan (which we can assume is mainly driven by China) is around EUR 3 billion, vs. a gain of about EUR 1.6 billion in Japan, therefore, the Asian region generated about EUR 1.4 billion less sales than in 2023. We can assume that this was mainly driven by the Chinese, the example of DFS and its current challenges are one example to illustrate the case.
(One side-note here: It is not explicitly stated how LVMH defines the regions – according to geography or citizenship/residency. From my analysis and the webcasts, I infer that it is not a location-based approach, but rather the citizenship/residency approach, meaning that if a Chinese person buys something in Paris, for example, it counts in the China-region. I am not 100% sure if this is correct, I assumed this because in the webcasts, LVMH referred to Chinese “off-shore” consumers and also because of this Japan scenario. If you know more about this, let me know in the comments below or send me a message.)
Perfumes & Cosmetics and Selective Retailing
While Wines & Spirits, Fashion & Leather Goods and Watches & Jewelry were struggling last year, the two segments with a more positive development were Perfumes & Cosmetics and Selective Retailing. The first one may be related to the overall economic climate and the aspirational customer mentioned above. It may be that this costumer does not want or cannot afford the leather goods at the moment, but they may still buy perfumes, cosmetics, or nail polish (which is a popular example for aspirational customers). LVMH sees the potential in this sector and tries to capture it. It remains to be seen how successful they will be in the long-run. It is not the core business of the conglomerate and the cosmetics industry may be even tougher than the fashion industry with even more competition. But it may pay off. Selective retailing invovles companies like Sephora, the cosmetics retailer, or the department store Le Bon Marché in Paris. While DFS was struggling, Sephora was praised by Mr Arnault and Mr Guiony for its good results.
Regional Split of Revenue
According to Mr Guiony, the regional split in 2024 was fairly balanced: 25% of revenue was generated in Europe and America respectively, 37% in Asia. Also Mr Arnault agreed that this balanced is needed as important to protection against negative developments in one particular region. This is very interesting to hear: For years, there was this extremely strong focus of luxury on Asia, in particular, on China. I am not sure if this indicates a shift away from the strategy. One thing I observed during the webcast was Mr Arnault’s enthusiasm about the American market. This is probably no surprise as he attended the inauguration of President Trump. He also did not fail to complain about the situation back in France. If I had been present in the room, I would have asked how Mr Arnault assesses the situation with possible tariffs for exports to the American market and what LVMH will do to try to mitigate these.
Further Data
Profit disappointed as it fell by 14% to EUR 19.6 billion. Profit margin also decreased from about 18% in 2023 to 15% in 2024. Furthermore, the operating margin (which is the operating income over revenue) decreased from 26.5% in 2023 to 23.1% in 2024. According to Mr Guiony and Mr Arnault, one-time costs impacted profit – for example charges relating to the involvement in the Paris Olympic Games.
Gross margin also decreased – from EUR 59.3 billion to EUR 56.8 billion. Gross margin is revenue minus cost of goods sold (or cost of sales). Basically it means: what money did a company make minus the cost of producing its goods sold. According to Mr Guiony, costs have increased slightly faster than revenue and LVMH has not or almost has not increased their prices to offset input cost. In relation to this, Mr Arnault later made a comment about other brands raising their prices for – as he said – “no reason”. He also made sure to add that none of these brands were part of LVMH, it is pretty obvious that he referred to their competitor Chanel.
Mr Arnault was positive overall, also remarking that numbers at the beginning of this year looked very promising. A lot of journalists linked this optimism to the re-edition of Louis Vuitton’s collaboration with Japanese artist Takashi Murakami which launched in January. It remains to be seen what this means for the rest of the year. I would also be a bit careful – this big just launched for Louis Vuitton, one of the “power houses” of the group. It remains to be seen if, firstly, how this campaign of one brand will impact the numbers of the whole group and, secondly, if we can infer links to the development of other brands in the LVMH portfolio.
Dividend
Over the past years, LVMH has been paying out dividends – in 2023, they paid out EUR 13 per share. The suggested dividend for 2024 will be the same as for 2023 – EUR 13, which will be split in EUR 7.50 and the EUR 5.50 of the interim dividend which was announced on 4 December 2024.
Outlook
The overall climate in the luxury industry is still uncertain. It remains to be seen what the next months will mean for LVMH and other luxury brands. The results were mixed across the segments, the challenges in Asia are still obvious and I am curious about the future development of the Fashion & Leather Goods segment in particular.
I would assume that the overall economic climate may not necessarily improve as fast as many of us would wish. A lot will also depend on the developments in America under President Trump. The Chinese market remins another big question mark. As previously mentioned, Mr Arnault sees a gradual recovery over the next two years. However, there are other representatives in the luxury industry who would disagree. A time horizon of two years may be a bit short. We need to observe how it develops; the reality of the economic situation remains uncertain at this point in time.
This may lead luxury brands to (start to) shift their focus a bit – India will be a big topic. I mentioned the “musical chairs” in my video about Matthieu Blazy at Chanel where I said that creative directors come and go fast. This seems to apply for luxury conglomerates – if one market does not work, they seem to move on to the next one. But similar to China, India is not market without challenges. Firstly, there is a lot of competition from local brands. Indian consumers are very proud of their heritage and quality. There is a hype around foreign luxury brands but it will be difficult to compete – not only in the fashion segment, where adapting to local taste may be even more crucial than in other countries, but especially also in the jewelry segment. India is a major hub for jewelry production, the country is one of the biggest diamond exporters. Consequently, there is a big offer of amazing local jewelry which may pose a big challenge for foreign brands. Furthermore, similar to China, India geopgraphically is a big country and far from homogenous – there are big differences in local taste within the country. Some products may be a hit across the country, some may have to be adapted.
We will also see how new campaigns affect LVMH. The hype around the Louis Vuitton x Murakami campaign was huge, but consumers complained about the execution of the campaign in stores and online. It may be a bit too early to judge how this affected the brand – in terms of sales, if they increased during the first quarter but also in the long-run, if this contributed to increased brand awareness. I am mentioning this because the first collaboration in the early 2000s achieved exactly that: Louis Vuitton turned itself into a “cool brand” with this artist collaboration. Maybe they tried not only to copy this financial success but increase or change brand awareness.
But we cannot limit the analysis and future outlook to one brand only. We will see how the developments in Perfumes & Cosmetics will affect LVMH. Another development which will be closely watched is Tiffany’s which has been undergoing restructuring. Mr Arnault also mentioned that he expects lay offs. Of course, all eyes are also on Dior which has been the centre of a lot of rumours over the past months, especially about their creative director Maria Grazia Chiuri. When analysts hinted at these rumours during the webcast, Mr Arnault dismissed them by saying that LVMH has long-term relationships with a lot of their employees, especially in the upper management segments of their companies. Let’s wait and see what happens – as we have seen from Chanel last year, a CEO may defend a creative director on one day and the next day, there is a big exit announcement.
Sources
LVMH Official Website, Investor Relations, LVMH 2024 Results online livestream on 28 January 2025, Yahoo Finance.
Picture Sources Title Image
Graph based on LVMH Official Website, made by the author
Disclaimer
All information as of the date of publishing/updating. We cannot accept responsibility for the correctness or completeness of the data, or for ensuring that it is up to date. All recommendations are based on the research, analysis and personal experience of the author, no fees were received.
Please note that this article is not intended for investment advice or recommendations but rather to simply share the author’s analysis and views . If you have further questions on investing, please consult a licensed financial professional.
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