Louis Vuitton bag
Stocks rise as luxury stocks sparkle / Image source: Adobe
  • Q4 and full year sales beat expectations
  • Fashion and leather see sales decline
  • 2025 started well

Luxury goods giant LVMH (MC:EPA) dropped 6% despite posting full year 2024 sales ahead of consensus forecasts after revealing weakness across its fashion and leather goods divisions.

The Louis Vuitton, Moet and Chandon and Hennessy brand owner arguably had a high bar to clear following upbeat sales reports from Cartier owner Richemont (CFR:SWX) and Burberry (BRBY) last week, raising hopes of a broader recovery in the luxury sector.

GOOD BUT NO CIGAR

Fourth quarter sales to the end of December rose 1% to €23.9 billion, taking full year sales up slightly to €84.7 billion against expectations for a decline.

The firm dashed hopes of recovery after its largest business segment, fashion and leather goods, booked a 1% decline while wine and spirits declined 8% during the final quarter.

Other divisions came to the rescue with watches and jewellery, including the Bulgari and Tiffany brands and perfumes and cosmetics booking a 2% increase in revenue.

All key regions including Europe, the US, and Japan saw sales growth with the rest of Asia region seeing ‘strong’ growth driven by spending by Chinese customers.

Full year operating profit from recurring operations fell by 14%, reflecting one-off charges.

CEO Bernard Arnault, the group’s controlling shareholder and France’s richest person called LVMH’s 2024 performance ‘resilient’ amid an uncertain environment.

On the earnings call Arnault noted 2025 had started well with Louis Vuitton and Tiffany seeing double-digit growth.

EXPERT VIEWS

Investment director at AJ Bell Russ Mould commented: ‘It might be too early to call a big improvement in the luxury goods market, judging by LVMH’s latest results.

‘They are not a disaster, but neither do they sparkle. The business is moving sideways rather than making strides on the catwalk. Richemont and Burberry’s recent updates injected some excitement into the sector amid signs that people were splashing the cash on luxuries once again.’

Berenberg summed up its Q4 views saying: ‘absolute luxury remains strong, aspirational uncertain, American consumers are starting to pick up while Chinese consumption remains very weak, albeit with the rate of decline decelerating.’

Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author (Martin Gamble) and the editor (Steven Frazer) own shares in AJ Bell.

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Issue Date: 29 Jan 2025