Sephora, Retail Division Drive LVMH’s Q4 Performance Amid Luxury Market Headwinds

As the sector’s global sales have slipped in recent years, luxury retail giant LVMH Tuesday (Jan. 28) reported a 1% rise in its fourth-quarter sales and 1% organic growth for 2024.

LVMH reported better-than-expected fourth-quarter sales for 2024, with a 1% rise to €23.9 billion, driven by growth in its retail division, particularly Sephora, and steady performance in its fashion and leather division.

“LVMH showed strong resilience,” LVMH CEO Bernard Arnault stated. “This capacity to weather the storm in highly turbulent times is yet another testament to the strength and relevance of our strategy.

“The creativity and very high quality of our products, our steadfast commitment to excellence, the agility of our teams and the good geographic balance of our locations underpin the success of LVMH and its Maisons, backed by the dedication of all our people.”

For 2024, revenue dropped 2%, to €84.7 billion, however, accelerated performance in the fourth quarter was driven by Asia, the U.S., and Europe. Arnault noted the American market is progressing “very dynamically” and he’s encouraged by a distinct “momentum.”

Arnault cited Sephora for its “remarkable performance, which consolidated its position as a world leader in beauty retail.” Additionally, there is “strong momentum in fragrances, driven in particular by the success of Dior’s Sauvage, which remained the world’s best-selling fragrance.”

As luxury brands like LVMH see strong sales in beauty and fragrance, it’s evident more affluent consumers are dedicating significant portions of their income to luxury products.

According to PYMNTS Intelligence report, “Why One-Third of High Earners Live Paycheck to Paycheck,” which surveyed more than 4,200 U.S. consumers to understand how they are spending their money across income groups, the highest earners (specifically those making over $200,000 annually), typically spend a large portion of their income on luxury items and experiences. On average, they allocate 9.3% of their income to recreation, leisure and entertainment and 8.5% to clothing, accessories and personal care. This shows high earners prioritize indulgent experiences and luxury goods more than other income groups.

As high earners continue to prioritize luxury goods, brands are turning their attention to older consumers — those over 50 — who control the majority of global wealth. This demographic, often overlooked in favor of younger shoppers, represents a stable and valuable market that aligns well with the heritage, craftsmanship and quality that luxury brands offer.

Bellamy Grindl, principal and founder, Retailytics, recently explained in an interview with PYMNTS, “This has long been a missed opportunity for the luxury market. Older generations not only have more disposable income but are also less price-sensitive and highly brand-loyal. They value quality and heritage, which aligns perfectly with what luxury brands offer. The problem is many feel ignored because media and marketing remain hyper-focused on younger audiences. By prioritizing youth, brands risk alienating a demographic that’s eager to invest in their products.”

Luxury brands, Grindl added, “should focus on truly engaging with older consumers in a way that feels authentic and values their purchasing power. Things like refining messaging, expanding channels to meet the customer where they are, and celebrating heritage and craftsmanship to build deeper emotional connections.”