LVMH’s latest earnings reflect a mixed recovery within the luxury goods sector, showing signs of struggle in some key areas.
The French conglomerate posted a modest 1% rise in fourth-quarter revenue, reaching €23.93 billion, although its fashion and leather goods segment, which includes Louis Vuitton and Christian Dior, saw a slight dip of 1%. Despite this, the company’s overall performance slightly surpassed analysts’ expectations.
Following the announcement, LVMH’s American Depositary Receipts (ADRs) dropped by 8.5% in the U.S., though its stock has surged 18% in European markets this year, buoyed by positive sentiment around the macroeconomic environment and strong performance from competitor Richemont.
For the full year, LVMH saw a 1% increase in organic sales to €84.68bn, exceeding the anticipated 2% decline, although profit from recurring operations dropped 14%. In a positive turn, free cash flow grew 29% to €10.5bn.
The company highlighted growth across all major regions, including Europe, the U.S., and Japan, with Chinese consumer spending driving growth in these markets. In contrast, Asia as a whole saw weaker demand. Wine and spirits experienced an 8% drop in the fourth quarter, while perfumes and cosmetics posted a slight 2% increase.
The watches and jewelry division, which includes brands like Bulgari and Tiffany, saw modest growth, with revenue up by 2%. However, on a reported basis, LVMH’s total revenue declined 2%, impacted significantly by exchange rate fluctuations, particularly in its fashion and leather goods and wine & spirits segments.
CEO Bernard Arnault reflected on the results, stating, “In 2024, amid an uncertain environment, LVMH showed strong resilience.” He also expressed confidence for 2025, noting that Louis Vuitton has already recorded double-digit growth this year.
The company also announced a dividend proposal of €13 per share, with €5.5 already paid in December and the remaining balance of €7.5 due in April, pending approval.
The performance comes as LVMH faces challenges tied to weaker demand from China and the aftermath of 2023’s post-pandemic sales surge. The results contrast sharply with those of rival Richemont, which saw record sales driven by strong jewelry demand. Similarly, Burberry recently reported a slower-than-expected sales decline, signaling the broader effects of the shifting luxury market dynamics.
