LVMH shares fall as 2024 results fail to impress investors

LVMH shares dropped on Wednesday as investors were not too impressed with the results posted by the luxury giant. LVMH: Annual revenue declines by two percent

The French luxury group reported revenues of 84.68 billion euros for 2024, exceeding the 84.38 billion euros forecast by LSEG analysts.

However, according to Reuters, LVMH performance failed to impress investors. Reuters quoted Citi analyst Thomas Chauvet saying: "With luxury peers (Richemont, Burberry, Cucinelli, Zegna) having reported significant QoQ sales improvement and beats vs. expectations, the bar for LVMH had undeniably increased in recent weeks.

Chauvet further said that despite a roughly 2 percent beat on fourth-quarter group and Fashion & Leather sales, this was insufficient to mark a turning point for the luxury brand. The development led to a 3.5 percent drop in LVMH's stock in Frankfurt, against a more than 30 percent rise since its November lows.

Commenting on the group’s financial performance, Bernard Arnault, chairman and CEO of LVMH, said: “In 2024, amid an uncertain environment, LVMH showed strong resilience.”

The company continued organic revenue growth driven by growth in Europe, the United States and Japan, and remarkable performance by Sephora. However profit was impacted by exchange rate fluctuations, particularly on Fashion & Leather Goods and Wines & Spirits.

On the other hand, LVMH rival Richemont, the company that owns Cartier, recently published a set of record-breaking holiday sales results, while LVMH saw declining sales for some of its key brands, including fashion, leather goods, and wines and spirits.

Investors’ response to LVMH results is a key indicator of the health of the entire luxury market that has been struggling due to global economic uncertainty.