(Updated - July 24, 2024 5:08 AM EDT)
LVMH Moët Hennessy Louis Vuitton, the world's leading luxury goods group, reported mixed results for the first half of 2024. As a result, the company's shares fell over 4% in Wednesday's trading session.
Revenue reached €41.7 billion, reflecting a 2% organic growth despite a challenging economic and geopolitical climate.
Profit from recurring operations came to €10.7 billion, exceeding pre-Covid levels. However, significant currency fluctuations negatively impacted the bottom line.
"The results for the first half of the year reflect LVMH's remarkable resilience," said Chairman and CEO Bernard Arnault. "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."
While revenue grew in Europe, the United States, and Japan (driven by Chinese tourist spending), profit from recurring operations for Wines & Spirits declined due to post-Covid demand normalization and weak Chinese demand for Hennessy cognac. Watches & Jewelry revenue also dipped due to currency fluctuations.
Despite these challenges, LVMH highlighted continued resilience in Fashion & Leather Goods, with Louis Vuitton and Christian Dior performing well.
The group also saw rapid growth in fragrances and makeup, with Sephora's strong performance solidifying its position as the leader in beauty retail.
Looking ahead, LVMH remains confident despite the uncertainties. The group said it will focus on brand desirability, product quality, and retail excellence to maintain its leadership position in luxury goods. An interim dividend of €5.50 will be paid in December 2024.
"We believe LVMH delivered a resilient performance in 1H24 despite a tough base of comparison and a weak environment in Mainland China. The key positive, in our view, is management commented on the Chinese cluster still being +HSD and the American cluster improving sequentially," analysts at Goldman Sachs said in a note.
"While there remains vulnerability in the entry level consumer segment in the US, in our view, there are some signs of encouragement particularly in Fashion & Leather Goods and including within the Wines & Spirits division where management indicated it is seeing signs of stabilisation (sell-in vs sell-out)."