LVMH Unlikely to Report Further Performance Deterioration -- Earnings Preview

LVMH Moët Hennessy Louis Vuitton (LVMH), the world's leading luxury products group, is expected to report its fourth-quarter 2024 earnings on February 12, 2025. Despite the challenges faced in 2024, analysts anticipate that LVMH's performance will not deteriorate further, thanks to a potential turnaround in the Chinese market and improved conditions in Europe and the United States.

In 2024, LVMH's earnings contraction was primarily driven by a slowdown in the Chinese luxury market and macroeconomic challenges. However, the company's diversified portfolio of Maisons (brands) has contributed to its resilience, with some sectors performing particularly well. For instance, the Perfumes & Cosmetics sector saw a 5% organic revenue growth in the first three quarters, while the Selective Retailing sector grew by 1% with a 6% organic increase. This resilience across sectors demonstrates the strength of LVMH's portfolio.

LVMH's strategic focus on desirability and responsibility has also contributed to its financial performance. The company's Maisons have consistently maintained their desirability by preserving their unique identities, heritage, and expertise. This focus has allowed them to build strong brand equity and customer loyalty. Additionally, LVMH's commitment to positive impact and sustainability has helped the company build a strong reputation and attract socially conscious consumers.

Looking ahead, the outlook for the coming quarters appears more promising. While demand from Mainland China remains subdued, recovery potential exists as economic conditions stabilize and consumer spending rebounds. Likewise, improved conditions in the European and U.S. markets, driven by lower interest rates and stronger macroeconomics in 2025 and 2026, are likely to contribute to better revenue growth for LVMH.



In conclusion, while LVMH faced challenges in 2024, its diversified portfolio of Maisons and strategic focus on desirability and responsibility have contributed to its resilience. With a potential turnaround in the Chinese market and improved conditions in Europe and the United States, LVMH is unlikely to report further performance deterioration in its upcoming earnings report. Investors should closely monitor the company's financial results and market reactions to assess its future growth prospects.