Yesterday, the LVMH Group announced its performance for the first half of 2024: sales revenue decreased by 1% year-on-year to €41.7 billion, with organic growth of 2%. The group stated that despite ongoing geopolitical and economic uncertainties, they achieved sustained growth during this period.
In the second quarter, LVMH Group’s global sales revenue decreased by 1% year-on-year to €21 billion (with organic growth of 1%). For the first half of 2024, the group’s recurring operating profit reached €10.7 billion, with an operating profit margin of 25.6%, significantly surpassing pre-pandemic levels. However, exchange rate fluctuations had a significant negative impact on the half-year performance. The group’s net profit was €7.3 billion.
LVMH Group Chairman and CEO Bernard Arnault commented, “The first half results demonstrate the extraordinary resilience of the LVMH Group, thanks to the strong strength of its brands and the team’s quick adaptability in an uncertain economic and geopolitical environment. We continue to pursue our dual goals of desirability and responsibility and remain committed to achieving the targets set in our environmental and social action plans.”
“In the important year of the Paris 2024 Olympics and Paralympics, we are honored to share our creativity, exceptional craftsmanship, and deep commitment to society to ensure the success of this event and to let France shine on the world stage. Despite the complex and volatile current environment, the group is confident about its development in the second half of the year and will rely on the flexibility and talent of its team to further consolidate our global leadership in the luxury goods sector in 2024.”
It is noteworthy that during the conference call following the financial report, Jean-Jacques Guiony mentioned “Chinese market” and “Chinese consumers” 76 times, making it the most discussed hot topic.
Jean-Jacques Guiony indicated that, regarding consumers, the number of American and European customers in the second quarter would be higher than in the first quarter, while the growth rate of Chinese customers in the second quarter was slightly lower than in the first quarter. Jean-Jacques Guiony emphasized, “The only thing I want to say is that brands that invested less in marketing in China over the past few quarters were penalized more than others. Consumer response to marketing stimuli in China remains very important. That’s why we continue to invest in this market, which is clearly a very important market for us.”
By region (on an organic basis), sales revenue in the Japanese market increased by 44% year-on-year in the first half, with its contribution to the group rising from 7% to 9%. The group stated that the yen is currently at its lowest point against the euro in 34 years, making Japan the most attractive shopping destination in Asia, especially for Chinese consumers.
Sales revenue in Asia (excluding Japan) decreased by 10% year-on-year, making it the only major region to decline, with its contribution to the group dropping from 34% to 30%, though it remains the group’s largest market. Additionally, sales revenue in the US and Europe grew by 2% and 3% year-on-year, respectively.
Regarding departmental performance, the Perfumes and Cosmetics division saw an organic sales revenue increase of 6% year-on-year in the first half with 4.1 billion euros, driven by the continued success of its flagship lines, strong innovation, and selective distribution strategy, with recurring operating profit remaining stable. Christian Dior performed excellently across all product categories, consolidating its leadership in strategic markets. Sauvage perfume continued to be one of the world’s top perfumes, and the iconic women’s perfume J’adore remained popular. The new Miss Dior Parfum saw a significant increase in sales. Makeup and skincare also contributed to the brand’s excellent performance, especially Rouge Dior lipstick and the Capture Totale skincare line.
Guerlain’s perfume innovations were outstanding, particularly Néroli Plein Sud in its L’Art et la Matière extraordinary perfume series. Parfums Givenchy continued to grow with its L’Interdit perfume. Benefit added eyebrow products to its Precisely, My Brow series. Fenty Beauty launched a new hair care product line and expanded its retail business in China.
The Selective Retailing division saw an organic sales revenue increase of 8% year-on-year in the first half, with recurring operating profit up 7% year-on-year. Sephora achieved significant growth and continued to gain market share, reaffirming its strong position in the high-end beauty market and the appeal of its unique approach, as well as its status as the world’s leading perfume and cosmetics retailer. Growth remained strong in North America, Europe, and the Middle East. DFS’s business activity was still below pre-pandemic levels in 2019, with significant differences in tourist traffic between destinations. Le Bon Marché continued to grow, thanks to its differentiated strategy, including a constantly updated range of products and services and unique event arrangements.
