LVMH’s Full Year 2024 Results Point to Positive Trends with A Cautionary Chaser
Luxury bellwether LVMH reported its full-year 2024 results after the close in Paris on January 27. The industry had a weak first nine months of the year, at least relative to the historic post-pandemic growth rates. Expectations were for a 1 percent decline in Q4 group sales year over year, which implied a decent bounce back after a 4.4 percent decline in Q3, but still in the wrong direction.
What we got was something a bit better for Q4 and a much better story going into H1. Overall reported group sales were down 0.1 percent in Q4, with positive 1 percent organic growth. This still left LVMH with a roughly 2 percent decline for the full year, following annual growth rates of 44 percent, 23 percent, and 9 percent during 2021-23.
But the key story from our way of looking through the prism is that this was a strong report. Fashion and leather goods (48 percent of group revenue), selective retailing (mostly SEPHORA and 22 percent of revenue) and watches and jewelry (12 percent) recorded significantly stronger sales in Q4 than in Q3. These three business groups comprised 83 percent of total sales and finished up 29 percent from October to December relative to July to September. This points to a potentially more promising prognosis for H1 2025 than the market expected just a few weeks ago, particularly after Richemont, Burberry, and Zegna also reported better-than-expected sales numbers this week.
Some cautionary elements for LVMH have implications for the rest of the industry. First, China continued to be a weak spot. Second, LVMH’s gross margins declined by 4 percent in 2024. This was, in part, due to flat pricing last year.
The 2024 results were issued after Paris trading closed on Tuesday, but the OTC secondary LVMHF listing in the U.S. closed down 2.3 percent, recovering after falling over 7 percent intraday.
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