LVMH Moët Hennessy Louis Vuitton, the world’s largest luxury conglomerate, reported a 4.4% decline in revenues for the third quarter of 2024, missing market expectations. The company attributed this slump to a marked slowdown in sales to Chinese consumers. LVMH’s total revenues for the quarter reached 19.07 billion euros, below the forecast of 20.01 billion euros, with organic sales down 3% year-on-year.
Despite this, LVMH’s chief financial officer, Jean-Jacques Guiony, expressed optimism, stating that the luxury sector could recover, particularly as China’s upper middle class continues to emerge.
In Perfumes & Cosmetics, the revenue reached 6.148 billion euros, growth of 5% in the first nine months of 2024, thanks to a strong innovation strategy and selective distribution. Christian Dior led the charge with notable success, particularly with the continued growth of Sauvage, the world’s top-selling fragrance. A key highlight was Rihanna becoming the new face of the iconic J’adore women’s perfume, further elevating its appeal. The launch of the new Miss Dior Parfum edition also contributed to Dior’s strong performance, along with its successful makeup and premium skincare lines. Fenty Beauty launched a new range of haircare products and expanded its retail presence in China.
Although LVMH stated in its financial report that Guerlain has maintained steady growth, during the conference call, LVMH mentioned that brands like Guerlain, which are heavily reliant on the Chinese market, are performing increasingly worse. Its L’Art & La Matière fragrance collection drove sales, complemented by the introduction of Florabloom to its Aqua Allegoria line. Givenchy also saw continued growth, fueled by the popularity of its new fragrance, L’Interdit Absolu. Additionally, Fenty Beauty expanded its portfolio with the launch of a new haircare range and strengthened its presence in China, further boosting LVMH’s beauty segment.
In In Selective Retailing, organic revenue growth was 6% with 12.559 billion euros in the first nine months of 2024. Sephora performed remarkably well and continued to gain market share in North America, Europe and the Middle East. DFS saw business activity remain below its 2019 pre-Covid level, with marked differences in tourist traffic between its various destinations. Le Bon Marché continued to achieve growth, driven by the department store’s differentiation strategy, with its continuously renewed selection of products and services and unique slate of events. LVMH also noted that while perfumes, cosmetics, and selective retail tend to be more resilient than other sectors, they are not entirely unaffected by the deterioration in Chinese consumer confidence.
In terms of specific regions, sales in Japan increased by 36% year-on-year in the first nine months of 2024, while sales in Asia (excluding Japan) declined by 12% year-on-year. Sales in Europe and the United States grew by 3% and 1%, respectively.
After a series of significant leadership changes at LVMH and the appointment of Bernard Arnault’s sons, Alexandre and Frédéric, to the board of directors, there is speculation that further management shifts are in the works.
This year alone, executive changes have included the nomination of a new deputy chief financial officer and the head of LVMH Fashion Group, as well as the departure of Antonio Belloni, who had long served as the group’s managing director.
In late September, it was revealed internally at LVMH that Christopher de Lapuente, CEO of the Selective Retailing division, is set to step down and will retire at the end of October.
Just this week, it was announced that Benjamin Vuchot, chairman and CEO of LVMH’s travel retail operator DFS, will step down to pursue other career interests, with Ed Brennan taking over as interim CEO.
