LVMH 2024 Financial Performance: Has the Luxury Powerhouse Peaked?

Feb 2

LVMH, the world’s largest luxury group, closed out 2024 with mixed results. While the company remains dominant in fashion, beauty, and luxury goods, currency fluctuations, slowing consumer demand, and cost pressures weighed on its financial performance.

With revenue down 2% year-over-year and profit from recurring operations falling 14%, is this a temporary setback, or are we witnessing the start of a structural shift in luxury retail?

A Tougher Year for Luxury, but LVMH Holds Strong

Despite challenges, LVMH delivered €84.7 billion in revenue, with 1% organic growth offset by a 2% hit from currency effects. The Euro’s strength against key invoicing currencies—particularly the Japanese yen and U.S. dollar—shaved off nearly €1 billion in revenue.

Fashion & Leather Goods, the company’s largest segment, saw a 1% organic decline, with strong sales in Japan failing to offset softness in the U.S. and Asia. Wines & Spirits took the biggest hit, down 11%, reflecting a normalization in post-pandemic demand and weaker cognac sales in China.

However, Sephora’s outstanding performance helped offset weakness in other segments. The beauty retailer continued to expand and drive Selective Retailing up by 6% organically.

Financial Highlights: Key Metrics at a Glance

LVMH’s financial performance shows both strengths and pressure points.

Revenue: €84.7B (-2% YoY, +1% organic)
Operating Margin: 23.1% (-3.4 pts YoY)
Profit from Recurring Operations: €19.6B (-14%)
Net Profit: €12.6B (-17%)
Free Cash Flow: €10.5B (+29%)
Dividend: €13 per share (unchanged from 2023)

LVMH maintains strong free cash flow and a solid balance sheet, but profit margins are under pressure. With operating investments declining (-26% YoY), is the company being cautious about future luxury demand?

Segment Breakdown: Where Growth Stalled & Where It Surged

Fashion & Leather Goods: Is Pricing Power Enough?

LVMH’s biggest revenue driver—which includes Louis Vuitton, Dior, Fendi, and Loewe—declined 1% organically and 3% on a reported basis. The U.S. and China were soft, while Japan’s weak yen boosted local demand. Despite this, LVMH’s pricing power remains intact, helping maintain a 37.1% operating margin—still exceptional but down from 39.9% last year. Louis Vuitton and Christian Dior remain the main profit engines, with Loewe and Loro Piana gaining traction.

Wines & Spirits: Normalization or Structural Decline?

Revenue dropped 11%, making it the worst-performing segment.

Cognac and spirits (-15%) saw sharp declines in China and the U.S.
Champagne & wines fared slightly better, declining 8%.
Profit margins collapsed from 31.9% to 23.1%, as volume declines and inventory adjustments weighed on results.

The demand slowdown is partly post-pandemic normalization, but also signals a more price-sensitive consumer market.

Perfumes & Cosmetics: Dior’s Sauvage & Sephora Drive Growth

Perfumes & Cosmetics grew 4% organically, led by Dior Sauvage’s continued global dominance. However, profitability weakened (-6%), with rising marketing costs impacting margins.

The bright spot? Sephora. The retailer’s expansion and continued dominance in beauty retail helped Selective Retailing grow +6% organically, making it LVMH’s strongest-performing division.

Watches & Jewelry: High-End Consumers Show More Price Resistance

Revenue declined 3%, with Bulgari, Tiffany & TAG Heuer struggling to sustain demand for ultra-luxury pieces. Profit from Watches & Jewelry plummeted 28%, with operating margins dropping from 19.8% to 14.6%.

LVMH has been aggressively investing in jewelry, but the question remains: is the high-end consumer pulling back?

Financial Strength & Investor Perspective

Balance Sheet & Cash Flow

LVMH remains financially solid, with €9.6B in cash and a net debt-to-equity ratio of just 13.3%. The company generated €10.5B in free cash flow (+29%), supporting both strategic investments and continued dividend payments (€13/share).

Valuation & Stock Performance

LVMH currently trades at a P/E ratio of ~25x and EV/EBITDA of ~14x, a premium valuation but justified by its brand dominance and pricing power.

Bull Case:

Strongest luxury portfolio in the world. Louis Vuitton, Dior, and Sephora are category leaders.
Sephora’s resilience compensates for softness in other areas.
Management is financially disciplined, maintaining cash flow and dividends.

Bear Case:

Luxury demand in the U.S. and China is slowing.
Wines & Spirits and Jewelry are facing structural demand pressures.
Stock remains expensive relative to potential near-term growth.

Final Thoughts: Is LVMH Still a Buy?

LVMH remains the undisputed leader in luxury, but 2024 revealed cracks in consumer demand. The biggest question for investors: Are we at peak luxury, or is this just a temporary macro-driven slowdown? With continued strong pricing power, financial stability, and Sephora outperforming, LVMH is still a long-term winner. However, valuation remains high, and short-term risks persist.

Access to LVMH full report here.

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Aman Gill