LVMH on Tuesday shared its financial report for the first half of 2024, revealing a fall in revenues for the second consecutive quarter.
Despite earning 2% organic growth in the first six months of this year, the world's largest luxury conglomerate reported revenues of €41.7 billion EUR in H1 2024, down 1% from the same period last year. The results also failed to meet analysts' estimates of €42.3 billion EUR, proving that even the most influential luxury labels are still being affected by the ongoing luxury slowdown.
Net profit was down by 14% to reach €7.27 billion EUR in the first half of this year. Profit from recurring operations, meanwhile, declined by 8% to €10.65 billion EUR, with an operating margin of 25.6%.
In the second quarter, LVMH reported sales of €20.9 billion EUR, up 1% from last year. However, the figure still fell short of analysts' predictions of €21.6 billion EUR for the three-month period ending June 30. As a result of ongoing uncertainty surrounding the luxury market, LVMH. shares have declined by 20% over the last year, while investors worry that consumers in China are "pulling back on purchases due to a property slump and job insecurity," per Reuters.
In Asia, excluding Japan, LVMH saw sales fall by 14% in the second quarter, marking a larger decline from the company's 6% slip in the first quarter. Japan's sales, however, increased thanks to a consumer-friendly currency-exchange rate.
LVMH CFO Jean-Jacques Guiony stated that "the Chinese customer is holding up quite well," per the outlet. He added, "We still see a lot of China travelers, particularly into Japan, which says something about the appetite of mainlanders for our brands, which shows no sign of fading away."
In North America and Europe, Guiony said sales are "slightly better."
LVMH's core business divisions, which include wine and spirits, fashion and leather goods, perfumes and cosmetics, watches and jewelry and selective retailing, experienced a 2% increase in organic revenue growth overall in the first half of the year.
"While remaining vigilant in the current context, the Group approaches the second half of the year with confidence, and will count on the agility and talent of its teams to further strengthen its global leadership position in luxury goods in 2024," Bernard Arnault, chairman and CEO of LVMH said in a statement.
See LVMH's full H1 2024 report here.
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