LVMH sales miss estimates amid China slowdown despite strong beauty and Sephora growth

25 Jul 2024 --- LVMH recorded revenue of €41.7 billion (US$45.2 billion) with a 14% slump in net profit in the first half of 2024. Its second quarter saw revenue growth of 1% and a 14% sales drop in Asia, mainly including China and excluding Japan. However, its beauty and Sephora businesses showed favorable performances.

The Perfumes & Cosmetics business group recorded organic revenue growth of 6% in the first half of 2024 due to its flagship lines, momentum and a selective distribution policy. 

Christian Dior achieved a “solid performance” in all product categories, with Sauvage becoming the “world’s leading fragrance.” The luxury house’s women’s perfume J’adore saw “ongoing success,” and the new Miss Dior Parfum edition achieved “strong growth.”

Guerlain had a “strong performance” in its fragrances, particularly Néroli Plein Sud in its L’Art et la Matière collection. Givenchy continued to see growth, driven by its L’Interdit fragrance.

Makeup and skin care also contributed to LVMH’s results, with the conglomerate highlighting Rouge Dior and Capture Totale. Benefit added new brow products to its Precisely, My Brow collection, while Fenty Beauty launched a new range of hair care products and expanded its retail presence in China.

General and store growth
Sephora continued to gain market shares in North America, Europe and the Middle East, maintaining “strong growth.” The luxury goods giant says the retailer consolidated its position as the “world leader in beauty retail.”

Dior Sauvage is called the “world’s leading fragrance” by LVMH.Bernard Arnault, chairman and CEO of LVMH, says that “the results for the first half of the year reflect LVMH’s remarkable resilience, backed by the strength of its Maisons and the responsiveness of its teams in a climate of economic and geopolitical uncertainty.”

The group achieved growth on a “constant consolidation scope” and currency basis in Europe and the US, while Japan recorded double-digit revenue growth. The rest of Asia reflected the “strong growth” in spending by Chinese customers in Europe and Japan.

Profit from recurring operations for the first half of 2024 came to €10.7 billion (US$11.6 billion), equating to an operating margin of 25.6%, which exceeded pre-COVID-19 levels. Exchange rate fluctuations had a “substantial” negative impact on the half-year period. LVMH’s share of net profit amounted to €7.3 billion (US$7.9 billion).

“Driven as ever by our dual focus on desirability and responsibility, we have continued to work toward achieving the targets in our environmental and social action programs. In a year marked by our partnership with the Paris 2024 Olympic and Paralympic Games, we are honored to share our creativity, excellent craftsmanship and deep commitment to society to make this event a resounding success and an opportunity for France to shine on the world stage,” highlights 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.”