The largest luxury group, LVMH, has released its results for Q3 2024. However, the organic sales of the group dropped 4.4% to 19.08 billion EUR (20.71 billion USD), missing the forecast set by analysts at Alpha Vision at 20.01 billion EUR (21.73 billion USD). The result has caused LVMH’s first nine months of 2024 to see a 2.2% drop in sales to 60.75 billion EUR (65.97 billion USD), also missing market expectations.
The market reacted to the news, with LVMH share prices dropping 11% in New York, making it the largest decrease in the group’s value in five years, currently at 301.6 billion EUR (327.50 billion USD). The drop also dragged down other stocks in the luxury sector. Gucci owner Kering saw a decrease of 3%, while Hermès was down 1.7% and L’Oréal was down 4.3%.
The LVMH report shows that sales in the fashion and leather goods division were down 5% compared to last year, while watches and jewellery and wine and spirits also saw negative growth. The only LVMH division that saw an increase during this period was perfume and cosmetics.
By market, Asia, including China but excluding Japan, dropped a whopping 16% in Q3 for LVMH and 12% in the first three quarters of 2024. LVMH CFO Jean-Jacque Guiony also specifically mentioned that Chinese consumers’ contribution to LVMH’s fashion and leather goods numbers decreased to the mid-single digits. It was also noted that 45% of Chinese consumers’ purchases took place outside of China. LVMH notes that sales in Japan, although growing 20% between July and September, had lost some momentum compared to the 32% and 57% of the first two quarters of this year.
The “revenge buying” of 2023 has subsided, and the travel boom calmed down this year. The uncertain economic outlook is one of the reasons LVMH has cited the slower-than-expected growth, which is valid both in China and globally. Perfume, cosmetics and retail brands such as Sephora and DFS have persisted in the Asian market. LVMH seems determined to keep expanding and leveraging the strength of these brands and branching out into personal care with L Catterton’s investments.
