US Rosé Sales Help LVMH Towards Year-End Recovery

Exchange rate fluctuations and a weak harvest weigh on profits.

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The shelves are full: Wines & Spirits was the weakest-performing category in LVMH’s portfolio in 2024. (Photo: AdobeStock/ltyuan)
The shelves are full: Wines & Spirits was the weakest-performing category in LVMH’s portfolio in 2024. (Photo: AdobeStock/ltyuan)

LVMH Moët Hennessy Louis Vuitton, the world’s leading luxury goods group, generated revenue of €84.7bn in 2024, achieving 1% organic growth (adjusted for currency effects and consolidations), according to the company. Reported growth declined by 2%. The company stated that this result was achieved despite a challenging economic and geopolitical environment and a high comparative base following several years of exceptional post-pandemic growth. However, currency fluctuations had a significant negative impact, particularly on Fashion & Leather and Wines & Spirits.
 

Low losses in the third quarter

Operating profit in Wines & Spirits fell by 36%, from €2.11bn to €1.36bn, mainly due to exchange rate fluctuations. Revenue in this segment declined 11% to €5.86bn (2023: €6.60bn). On an organic basis, the revenue decline was limited to 8%, according to the company. This made Wines & Spirits the most loss-making division in terms of both profit and revenue.

LVMH recorded a 3% revenue decline in Fashion & Leather (profit -10%) and Watches & Jewelry (profit -28%). In contrast, Perfumes & Cosmetics achieved 2% revenue growth, though profits fell by 6% (all figures based on reported growth).

The Champagne & Wines segment (a subdivision of Wines & Spirits) generated €3.2bn in 2024, marking a decline of 8% (organic: -3%). However, the figures indicate a significant recovery in Champagne & Wines during the second half of the year. While the segment recorded a 12% drop between January and June, the decline narrowed to 5% from July to December, with a mere 3% decrease in the third quarter.

Insights

Consumers are turning away from pricey French sparklers in favour of cheaper options from elsewhere. Jeff Siegel reports.

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Champagne market share maintained at 22%

The company highlighted that demand volumes are normalizing, despite slower consumption and a challenging market environment in China. LVMH’s Champagne houses managed to maintain their market share of over 22% of all shipments labeled Champagne. However, poor weather in early summer led to a low harvest in Champagne, impacting profits.

Among wines, Château d’Esclans in Provence continued to show strong momentum in rosé wines, particularly in the United States. LVMH also pointed to its new partnership with French Bloom, a brand specializing in premium non-alcoholic sparkling wines.
 

Cognac & Spirits down 15%

The Cognac & Spirits segment declined 15% (organic: -14%). Hennessy was affected by weaker local demand. The company also highlighted the successful launch of Sir Davis Whisky, created by Beyoncé Knowles-Carter, as well as further innovations in its whisky brands Glenmorangie and Ardbeg.

The Wines & Spirits division accounts for nearly 7% of LVMH’s total revenue. Its wine portfolio includes Moët & Chandon, Veuve Clicquot, Ruinart, Dom Pérignon, and Krug in Champagne, as well as Bodega Numanthia, Chandon, Château d'Esclans, Château Galoupet, Cloudy Bay, Newton, and Terrazas. The Cognac & Spirits segment includes Hennessy, Ardbeg, Belvedere, Eminente, Glenmorangie, Volcán de mi Tierra, and WhistlePig. KA

 

 

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