• Revenue: EUR84.6 billion, with 1% organic growth.
• Operating Income: Decreased by 14%.
• Net Profit: EUR12.5 billion, down 17% from the previous year.
• Gross Margin: Decreased by 180 basis points.
• Debt: Reduced from EUR10.7 billion to EUR9.2 billion.
• Free Cash Flow: Increased by EUR2.4 billion.
• Dividend Payout: Proposed EUR13 per share, with EUR7.5 to be paid in April.
• Regional Revenue Mix: Europe and US at 25% each, Asia at 28%, Japan increased from 7% to 9%.
• Fashion and Leather Goods: Organic growth at minus 1%.
• Watches and Jewelry: 4% increase in organic growth.
• Wines and Spirits: Negative organic growth, with a significant drop in operating margin.
• Selective Retailing: Contrasting performance between DFS and Sephora.

• Warning! GuruFocus has detected 6 Warning Signs with FFIV.

Release Date: January 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lvmh Moet Hennessy Louis Vuitton SE (LVMHF) signed a 10-year contract with Formula 1, which is expected to positively impact the brands involved.
• Despite a challenging global environment, the company reported organic revenue growth in 2024.
• Sephora achieved exceptional growth, with revenues now more than ten times what they were in 1998.
• Fashion and leather goods, particularly Louis Vuitton and Christian Dior, reported strong performances with innovative events and product launches.
• The company maintained its commitments to diversity, employee well-being, and environmental sustainability.

Negative Points

• Operating income decreased, impacted by a EUR1 billion hit from outstanding items.
• The wines and spirits segment faced challenges, with a notable decrease in cognac and spirits demand.
• DFS, the company's tax-free retailing arm, struggled due to unfavorable currency conditions in key geographies like Hong Kong and Macau.
• The company faced a drop in recurring operating income due to high costs associated with major events like the Olympic Games and the renovation of Notre-Dame.
• The ForEx impact was negative, contributing to a EUR1 billion decrease in operating profit.

Q & A Highlights

Q: Could you provide more information about the performance in various geographies, especially regarding Chinese and American customers? A: Chinese customers remained stable in 2024, with a positive performance in H1 and slightly less in H2. The situation improved in Q4, particularly in fashion and leather goods. In the US, the customer base was stable, with a negative trend in H1 and positive in H2, though changes were minor.

Q: Are you satisfied with Dior's performance, and what are your plans for LVMH's business development in the US? A: Dior is the number one French haute couture brand and performed best among competitors in 2024. We are confident about its future. In the US, we see optimism and opportunities, with new store openings showing exceptional success. However, we face challenges with higher taxes in France compared to the US.

Q: What are your thoughts on the economic situation in China and the potential impact of the government's stimulus plan? A: The Chinese government is aware of the need to kickstart the economy, and plans have been announced to help. Our high-quality products remain desirable in China, and we expect a gradual recovery over the next two years.

Q: What challenges does the new team in the wines and spirits division face, and are there any plans for divestment? A: The new team faces challenges such as inventory management and competition. There are no plans for divestment. We expect a recovery in two years, supported by the new management team.

Q: Can you provide an update on Tiffany's financial situation and any plans for expansion in Europe? A: Tiffany was a "sleeping beauty" before our acquisition. We have revitalized the brand, leading to a 9% increase in Q4 2024. We are confident in its future, with plans to develop key icons and expand store presence, resulting in significant revenue growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.