LVMH’s Revenue Beats Expectations in 2024, European and American Markets Rise While Asia Cools

Global luxury giant LVMH’s financial report for 2024 showed a modest 1% revenue increase compared to the previous year, surpassing expectations. In particular, revenue in the European, American, and Japanese markets saw a rise, while LVMH’s largest market, Asia (excluding Japan), experienced a decline of around 11%. Prior to this, consulting firms predicted a 15% contraction in the Chinese luxury goods market.

On January 28, local time, the French-headquartered LVMH Group released its financial performance for the fourth quarter and full year of 2024.

According to the financial report, revenue for the fourth quarter of 2024 amounted to 23.93 billion euros, with a 1% year-on-year increase based on organic growth. Analysts had previously forecasted LVMH’s revenue to be 23.5 billion euros, with organic growth expected to decrease by 1.26%.

For the full year of 2024, LVMH’s revenue reached 84.68 billion euros, showing a 1% increase based on organic growth, higher than the market’s expectation of 84.36 billion euros.

The group’s recurring operating profit decreased by 14.2% year-on-year to 19.571 billion euros, while net profit fell by 17% to 12.55 billion euros.

In 2024, LVMH’s global market share and revenue growth/decline were as follows:

– Revenue share in the European market was 25%, on par with 2023; revenue increased by 3% year-on-year, with a 4% growth in the fourth quarter and 2% in the third quarter.
– The United States market share remained at 25%, in line with 2023; revenue increased by 2% year-on-year, with a 3% growth in the fourth quarter and zero growth in the third quarter.
– In Japan, market share was 9%, up from 7% in 2023; revenue grew by 28% compared to 2023, with an 8% growth in the fourth quarter and 20% in the third quarter.

Asia, including China, is LVMH’s largest market. In 2024, the region’s revenue share was 28%, down 3% from 2023; revenue declined by 11% compared to 2023, with a 10% decrease in the fourth quarter and 16% in the third quarter.

The continued economic downturn in China undoubtedly impacted LVMH’s revenue performance in the Asian market.

In June 2023, LVMH’s CEO Bernard Arnault visited China and inspected a five-story building in Beijing where the company’s top brand, Louis Vuitton (LV), planned to open a flagship store in the first half of 2024.

According to Bloomberg’s report in early November last year, insiders revealed that this store might not open until 2025. The slow progress of such a crucial project highlights the challenges faced by European luxury companies like LVMH Moet Hennessy Louis Vuitton SE in China.

The report noted that sales executives used to be accustomed to customers eagerly purchasing the latest products, but now it’s difficult to get VIP clients to respond. Consulting firm Digital Luxury Group stated that the Chinese luxury goods market is expected to contract by 15% in 2024.

Barclays analysts, after visiting China in December of last year, stated that the Chinese market lacks “meaningful and sustainable demand recovery,” with even the wealthiest Chinese individuals cutting back on spending. The trend of downgrading consumption is expected to continue, with established brands like Tiffany & Co., Arc’teryx, and Coach being relatively popular due to their moderately higher prices.