It appears that sales of luxury products have been declining in many categories throughout 2024, but the beauty category still remains relatively strong.
LVMH has just announced its half year financial results for the first half of the year, and it has become clearer that consumer appetite for many types of luxury goods has slowed.
Although the French multinational, which is a sector leader and ‘benchmark’ for the state of luxury sales, recorded revenue of €41.7bn in the first half of 2024, it saw just 2% sales growth on an organic basis, while its reported figures fell by 1%. This was a dramatic contrast to last year’s results.
“Remaining vigilant in the current context”
Group sales in Asia (which includes China but not Japan) fell by 14% in the three months to the end of June, further declining from a 6% drop in the first quarter.
Even some of LVMH's strongest brands and divisions are struggling to cope with slowing demand from Chinese luxury consumers
In recent months, the company's luxury competitors, such as Kering and Richemont, have also shown similar results.
There has been a notable trend of Chinese shoppers cutting back on luxury purchases, which has coincided with the government censoring the social media accounts of influencers who have displayed their luxury goods online.
However, in stark contrast to China, LVMH’s sales in Japan saw double-digit revenue growth.
LVMH was now cautious about its prospects for the second half of the year, due to “limited visibility”, according to its CFO Jean-Jacques Guiony on the financial results analyst call.
Chairman and CEO Bernard Arnault, spoke of “the climate of economic and geopolitical uncertainty” and shared that the company had “continued to work towards achieving the targets set out in our environmental and social action programs”.
Arnault added that it was “remaining vigilant in the current context” but that it still “approaches the second half of the year with confidence.”
“Solid momentum in fragrances and makeup.”
LVMH's star beauty retailer Sephora still delivered a strong performance, while its Perfumes & Cosmetics division also saw “solid momentum in fragrances and makeup.”
The Perfumes & Cosmetics division recorded organic revenue growth of 6% and within this, the Christian Dior brand was the standout top performer. LVMH said that the Sauvage, J’adore and new Miss Dior Parfum edition fragrances all achieved strong growth.
Dior’s makeup and skin care lines, in particular Rouge Dior and Capture Totale, also added a solid contribution to the growth.
The other brands that were namechecked in terms of seeing successes in growth and expansion were Guerlain, Givenchy and Fenty Beauty.
Meanwhile, for LVMH’s Selective Retailing division, which includes Sephora, organic revenue growth was 8% in the first half of 2024.
Sephora continued to gain market share with its impressive sales results, which LVMH said reaffirmed its “position as the world’s leading fragrance and cosmetics retailer.”
