Mixed Q3 2024 Results for French Luxury Giants
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In Q3 2024, French luxury groups showed mixed results. LVMH saw a 4% decline in sales, impacted by strong USD and the political situation in France. Kering, with a 15% drop in sales, struggled primarily due to Gucci's poor performance. In contrast, Hermès reported an 11% sales growth, driven by its ultra-luxury positioning and strong European performance. Hermès has more than doubled its revenue since 2020, demonstrating resilience in a challenging market.
Mixed Results for French Luxury Groups in Q3 2024
In the third quarter of 2024, the major French luxury groups showed mixed results, following a period of continuous and, at times, extraordinary growth between 2016 and 2022. After a forced downturn during the lockdown period, the sector experienced a strong and steady recovery, partially fueled by the savings consumers accumulated during the pandemic. China, accounting for over 25% of global luxury goods sales, ranks second worldwide, just behind the United States. However, both countries are now experiencing significant declines in consumption within the luxury sector, due to various factors. Additionally, another important market, Japan, is also showing signs of a slowdown.
LVMH: A Slowdown in Growth
LVMH, the world’s largest luxury group with revenues of €86.2 billion, reported a 4% decline in sales in Q3 2024 compared to the same period in 2023, with quarterly revenues of €19 billion. On the stock market, LVMH has seen an 8% drop in the past year. The challenges in the Euro-Asian market are further compounded by the precarious political situation in France. Prime Minister M. Barnier is working on the new budget law, which needs to raise over €60 billion to address the national budget deficit, with at least €40 billion expected to come from new taxes on households, and especially on wealthier companies, including LVMH.
KERING: Struggling with a Decline in Sales
Kering, with revenues of €19.6 billion, has seen a 15% drop in sales in Q3 2024 compared to the same period in 2023, and a quarterly turnover of €3.8 billion. Over the past year, Kering’s stock has fallen by 42%. The company is facing significant challenges, especially due to the poor performance of its flagship brand, Gucci, which accounts for 50% of Kering’s total sales. Gucci has seen a 15% decline in sales in Q3 2024 compared to the previous year.
Hermès: A Bright Spot in the Luxury Sector
In contrast, Hermès has shown impressive growth. The company reported revenues of €13.4 billion, with an 11% increase in sales in Q3 2024, and quarterly revenues of €3.7 billion. Hermès’ stock has gained 20% in the past year. The brand stands out from other major French luxury groups because it has never experienced a break in its positive sales trend. Notably, sales in Europe (excluding France) increased by 18.8%. Furthermore, Hermès has more than doubled its revenues since 2020, from €6.4 billion to €13.4 billion in 2023, while tripling its net profit from €1.3 billion to €4.3 billion. The brand’s continued success lies in its positioning in the ultra-luxury segment, catering to the wealthiest buyers, who are less affected by market fluctuations, thus ensuring strong and sustained demand over time.
Fabio Accinelli
Mixed Results for French Luxury Groups in Q3 2024
In the third quarter of 2024, the major French luxury groups showed mixed results, following a period of continuous and, at times, extraordinary growth between 2016 and 2022. After a forced downturn during the lockdown period, the sector experienced a strong and steady recovery, partially fueled by the savings consumers accumulated during the pandemic. China, accounting for over 25% of global luxury goods sales, ranks second worldwide, just behind the United States. However, both countries are now experiencing significant declines in consumption within the luxury sector, due to various factors. Additionally, another important market, Japan, is also showing signs of a slowdown.
LVMH: A Slowdown in Growth
LVMH, the world’s largest luxury group with revenues of €86.2 billion, reported a 4% decline in sales in Q3 2024 compared to the same period in 2023, with quarterly revenues of €19 billion. On the stock market, LVMH has seen an 8% drop in the past year. The challenges in the Euro-Asian market are further compounded by the precarious political situation in France. Prime Minister M. Barnier is working on the new budget law, which needs to raise over €60 billion to address the national budget deficit, with at least €40 billion expected to come from new taxes on households, and especially on wealthier companies, including LVMH.
KERING: Struggling with a Decline in Sales
Kering, with revenues of €19.6 billion, has seen a 15% drop in sales in Q3 2024 compared to the same period in 2023, and a quarterly turnover of €3.8 billion. Over the past year, Kering’s stock has fallen by 42%. The company is facing significant challenges, especially due to the poor performance of its flagship brand, Gucci, which accounts for 50% of Kering’s total sales. Gucci has seen a 15% decline in sales in Q3 2024 compared to the previous year.
Hermès: A Bright Spot in the Luxury Sector
In contrast, Hermès has shown impressive growth. The company reported revenues of €13.4 billion, with an 11% increase in sales in Q3 2024, and quarterly revenues of €3.7 billion. Hermès’ stock has gained 20% in the past year. The brand stands out from other major French luxury groups because it has never experienced a break in its positive sales trend. Notably, sales in Europe (excluding France) increased by 18.8%. Furthermore, Hermès has more than doubled its revenues since 2020, from €6.4 billion to €13.4 billion in 2023, while tripling its net profit from €1.3 billion to €4.3 billion. The brand’s continued success lies in its positioning in the ultra-luxury segment, catering to the wealthiest buyers, who are less affected by market fluctuations, thus ensuring strong and sustained demand over time.
Fabio Accinelli