LVMH's U.S. Growth Drives Q4 Revenue Beat, Shares Slip on Currency Headwinds

LVMH Moët Hennessy Louis Vuitton (LVMH), the world's leading luxury goods group, reported better-than-expected full-year sales on Tuesday, driven by strong growth in the United States. However, the company's shares slid over 6% as investors reacted to currency headwinds and muted sales growth in other regions.

In the fourth quarter, LVMH's organic revenue growth came to 1%, accelerating with respect to the third quarter. The company's U.S. growth was particularly notable, with the fashion and leather goods unit posting a 1% decline in revenues on an organic basis, beating consensus estimates for a 3% drop. Other sectors, such as watches and jewelry, selective retailing, and fragrances, also saw improvements during the key holiday period.

LVMH's U.S. growth can be attributed to several factors, including strong demand for luxury goods, the robust performance of key brands like Louis Vuitton and Dior, and investments in communications and the evolution of stores. The company's agility and the talent of its teams have also contributed to its resilience and success in the U.S. market.

However, exchange rate fluctuations had a substantial negative impact on LVMH's profit in 2024, particularly for Fashion & Leather Goods and Wines & Spirits. The unfavorable exchange rates contributed to the decline in profit for these two segments, despite the solidity of Fashion & Leather Goods driven by the powerful appeal of its products.

LVMH's strong resilience and continued organic revenue growth indicate that the company was able to weather the storm in a highly turbulent environment. The company's commitment to sustainability and responsible business practices, as demonstrated by its LIFE 360 environmental program, has also contributed to its success.

In 2024, LVMH met its target for reducing absolute energy-related GHG emissions (Scopes 1 and 2) two years ahead of schedule, achieved a 31% circular design policy, reduced water withdrawal by 10%, and regenerated or restored flora and fauna habitat to 3.8 million hectares. These strategic initiatives, along with LVMH's commitment to creativity, excellence, and agility, have contributed to the company's resilience and success in 2024.

As LVMH looks ahead to 2025, the company remains vigilant regarding cost management and continues to monitor the economic environment to ensure long-term success. While the company enters the new year with confidence, guided by its mission and core values, it remains focused on maintaining the desirability of its products and extending its leadership in the luxury market.