LVMH revenue slips as luxury sales slow

The world’s No.1 luxury conglomerate, LVMH, the French luxury behemoth behind brands like Louis Vuitton, Dior and Hennessy, reported a revenue decline for the second consecutive quarter this year, citing sales slowdown.

LVMH shares dropped 4.7% on the London Stock Exchange yesterday. The company reported revenues of 41.7 billion euros for the first half of 2024, down from analysts’ estimates of 42.3 billion euros. Sales in its Asia market fell 14% over three months ending June 30.

The decline in LVMH’s stock this year has reduced the fortune of the owner and the world’s third richest person, Bernard Arnault, by nearly $11 billion, per Bloomberg.

Interestingly, the French luxury giant reported sales in Japan, where wealthy Chinese make shopping trips, were up 57%.

The company also noted that Europe, the United States and China were “most affected by lower consumer demand” in the wine and spirits division.

The luxury market enjoyed high sales in 2022 and 2023 when the middle class powered the growth of the industry through prestige purchases.

However, inflation, higher interest rates and youth unemployment are weighing down on the consumers.

It’s not only LVMH that faces less consumer spending on luxury goods. Competing brands like Swiss watchmaker Swatch Group AG, luxury group Burberry, Gucci-owner Kering, and Cartier parent Richemont are also struggling in sales across Asia and Europe.