Over the past day, markets have seen that while the post-pandemic luxury sales boom is indeed over, the industry continues to grow.
First, LVMH released its Q1 2024 results today after Paris trading closed, which showed that organic revenues grew by 3 percent relative to the same period in 2023. Currency depreciation effects had a strong impact on top line results during the quarter, lopping off 4 percent to take total revenues down 2 percent in Q1. These results were in line with market expectations though were LVMH’s weakest revenue growth numbers since the start of the pandemic luxury boom.
Revenue growth for LVMH was up around 2 percent in the U.S. and Europe though fell by 6 percent in China. Slowing consumer demand in China was revealed in late 2023, yet in the past week there may be some cause for optimism that China will bounce back over the course of 2024 and help lift luxury sales. Just today, China released data showing that its Q1 GDP hit 5.3 percent, smashing economists’ expectations for a 4.6 percent print. Also today, the IMF upgraded (https://lnkd.in/gY5z8Wip) its 2024 full year GDP growth forecast for China by 0.4 percentage points to 5.2 percent, which is 0.2 points higher than the government’s own target growth rate.
Outside of LVMH, Tapestry confirmed on April 15 that their planned $8.5 billion deal to buy Capri has received regulatory clearance from the European Union and Japan. The U.S. Federal Trade Commission continues to review the deal.
Luxury stocks outperformed the broader market today with the FSW High F luxury industry closing up by 0.6 percent, LVMH was up by over 1 percent, and Tapestry has been up close to 2 percent since they received EU and Japan clearance on Monday. The broader S&P 500 was down by 0.2 percent today.
You can find LVMH’s Q1 2024 results here: https://lnkd.in/gjqe7Yxk