Hennessy is also difficult to sell, and LVMH’s liquor business has declined for two consecutive years

Blue Whale News, February 6 (Reporter Zhu Xinyue) Recently, LVMH, the world’s largest luxury goods group, disclosed its fourth quarter and full year 2024 results report.

The financial report shows that LVMH’s full-year revenue in 2024 was approximately 84.7 billion euros (approximately RMB 640.6 billion), down 2% year-on-year. Operating profit was 19.571 billion euros (approximately RMB 148 billion), down 14% year-on-year.

Among them, the wine and spirits business dragged down overall performance. In 2024, the overall revenue of the wine and spirits business will be 5.862 billion euros (approximately RMB 44.3 billion), a year-on-year decrease of 11%, and an organic decline of 8%, while operating profit will be 1.356 billion euros (approximately RMB 10.2 billion), compared with the previous year’s 2.109 billion euros, a sharp drop of 36% year-on-year. In fact, the operating profit margin of the liquor sector has dropped from 31.9% in 2023 to 23.1% in 2024.

This is the second consecutive year that the wine and spirits business has delivered a poor report card, showing continued downward pressure. In 2023, the business’s full-year revenue fell 7% year-on-year to 6.602 billion euros (approximately RMB 49.9 billion), and organic revenue fell 4%.

LVMH said in its financial report that one of the reasons for the sharp decline in liquor profits was due to exchange rate fluctuations.

LVMH LVMH Group is the world’s largest luxury goods group, with wine and spirits brands such as Moet, Hennessy, Dom Perignon and Clicot.

LVMH Group said in its financial report that despite the decline in champagne sales, its champagne brand still occupies the core position of the French Champagne producing area, and its shipments still maintain a market share of more than 22% of all Champagne.

Financial report analysis pointed out that after three years of abnormal growth, demand for champagne and cognac will enter a normalization stage in the post-epidemic era in 2023, and this trend will continue in 2024. At the same time, the slowdown in consumption in the China market and the severity of the overall market environment have had a significant impact on LVMH’s liquor business.

Not long ago, global spirits group Pernod Ricard announced that it would sell a series of its international wine brands, which also triggered market speculation that LVMH might sell its wine and spirits division, but LVMH executives have clearly denied this rumor.

However, for its well-known cognac brand Hennessy, LVMH Group admitted that its revenue was double dragged down by weak local demand in China and the challenging U.S. market environment.

As we all know, EU brandy is facing unprecedented challenges. On October 11, 2024, the Ministry of Commerce announced the implementation of temporary anti-dumping measures on imported brandies originating in the European Union, and extended the anti-dumping investigation period to April 5, 2025.

This is also the biggest crisis that EU brandy, including Hennessine, will face. According to data from the French National Cognac Industry Office, global exports from French cognac manufacturers have dropped by 10.6% compared with 2023. This decline was mainly due to the China market.

Regarding 2025, LVMH said that the market environment is still shrouded in uncertainty in many regions around the world, so it will welcome 2025 with a vigilant and pragmatic attitude. While continuing to strictly control costs, proactive brand policies will be implemented to maintain its market share growth goal.