What: LVMH reports 2% revenue decline in 2024 while forecasting US market boom and slower Chinese recovery under Trump's presidency.

Why it is important: This development marks a pivotal moment in luxury retail's post-pandemic recovery, highlighting how political changes and economic policies are reshaping global luxury consumption patterns.

LVMH's performance in 2024 reflects significant shifts in the global luxury landscape, with the conglomerate reporting a 2% decline in revenues amidst varying regional performances. Bernard Arnault's presence at Trump's inauguration and subsequent commentary highlights the group's strategic pivot towards the US market, where proposed corporate tax reductions to 15% and state subsidies present attractive opportunities. While expressing confidence in the US market's potential boom, Arnault maintains a measured outlook on China, suggesting a two-year timeline for market normalisation. The group's fourth-quarter performance showed promising signs, with flat revenues and improving trends in its fashion and leather goods division. Notable bright spots included Tiffany's 9% growth and strong January performance across several brands. Despite challenges, LVMH's strategic approach balances immediate market opportunities with long-term growth potential, particularly evident in its selective retail expansion and management restructuring.

IADS Notes: The luxury market's current transformation reflects broader industry challenges seen throughout 2024. In October 2024, LVMH's fashion and leather goods division experienced a concerning 5% decline in sales, foreshadowing Bernard Arnault's cautious outlook for China. This aligns with the global luxury market's most challenging period since the Great Recession, marked by a 2% decline in sales and the loss of 50 million consumers over two years. However, despite these immediate challenges, PwC's September 2024 forecast suggests a potentially robust future for the Chinese market, projecting it could become the world's largest luxury market by 2030, reaching USD 148 billion. This long-term outlook helps contextualise Arnault's strategic approach of maintaining steady investment in China while actively pursuing US market opportunities.

LVMH reports 2% revenue decline in 2024