"The Luxury Goods Industry's Sarcophagus: Insights from LVMH's 2024 Financial Report

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The Luxury Goods Industry's Sarcophagus Insights from LVMH's 2024 Financial Report

As historians, we're fascinated by the ebbs and flows of markets and economies. The luxury goods industry is no exception. Recently, LVMH, Europe's largest company by market value, released its financial report for 2024. In this post, we'll delve into the main points from the report, exploring what it means for the industry and the world at large.

Key Takeaways

### 1. Net Profit Declines 17%

LVMH's net profit fell 17% to €12.55 billion ($13 billion) in 2024, a drop attributed to the post-Covid boom that ended in 2023. As Jean-Jacques Guiony, LVMH's financial director, noted We had three years of euphoria from 2021-2023, and a year of consolidation in 2024. The luxury goods industry has seemingly been laid to rest in a sarcophagus, waiting for the next wave of consumer demand.

### 2. Sales by Sector

The report highlights LVMH's diverse business portfolio

Leather and fashion unit sales fell 3% to €41 billion.
Retailing (including Sephora and Bon Marche) grew 2% to €18.3 billion, driven by Sephora's continued growth and Bon Marche's strong performance.
Watches and jewelry revenue slipped 3% to €10.6 billion.
Wines and spirits dropped 11% to €5.9 billion.

These figures demonstrate the resilience of certain sectors, such as retailing, while others, like leather and fashion, felt the impact of the slowdown.

### 3. Regional Performance

The report reveals regional variations in sales

Europe and the United States saw a slight improvement towards the end of the year.
The Asia-Pacific region experienced a decline due to ongoing economic challenges.

LVMH's ability to adapt to changing market conditions is evident, particularly in Europe and the United States, where consumers are becoming more cautious. The Asia-Pacific region, which has been a significant driver of growth for many luxury goods companies, is experiencing a slowdown due to economic headwinds.

### 4. Cost Management and Dividend Payment

LVMH's commitment to shareholders and cost management is evident

The company will pay a dividend of €13 per share.
LVMH remains vigilant about cost management, focusing on the desirability of its designs.

The dividend payment reflects LVMH's commitment to shareholders despite challenging market conditions. The emphasis on cost management and design quality underscores the company's long-term approach as it seeks to maintain its position in the luxury goods industry.

### 5. CEO Bernard Arnault's Statement

Arnault's statement highlights the company's ability to adapt to changing circumstances

In 2024, amid an uncertain environment, LVMH showed strong resilience.
While remaining highly vigilant with regard to cost management and our single-minded focus on the desirability of our designs, we enter 2025 with confidence.

Arnault's statement emphasizes LVMH's ability to adapt to changing market conditions while maintaining its focus on core strengths designing desirable products and managing costs effectively.

Conclusion and Call-to-Action

In conclusion, LVMH's 2024 financial report showcases the luxury goods industry's resilience in the face of uncertainty. As historians, we can learn from the company's ability to adapt to changing market conditions and maintain its focus on design quality.

As you read this post, ask yourself What lessons can be applied to your own field or profession? How do you stay adaptable in the face of uncertainty?

Optimized Keywords LVMH, luxury goods industry, financial report, 2024, net profit, sales, market trends, cost management, design quality.

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.