On the heels of fashion month, French conglomerate LVMH confirmed what the industry has been feeling for months: The luxury sector is slowing. But during its earnings call for the third quarter of 2024, the owner of Dior and Louis Vuitton shared a bright spot amid an overall decline: fragrance. For the first nine months of 2024, LVMH reported a 5% increase in revenue in its perfume and cosmetics division compared to the same period in 2023, reaching €6.1 billion ($6.6 billion) in revenue.
But the fragrance boom may not hold forever. LVMH reported a 3% increase in revenue for perfume and cosmetics for the third quarter of 2024, but that figure failed to maintain the momentum of Q1 2024, when it saw a 7% increase compared to Q1 2023. In the second quarter of 2024, LVMH reached a 4% growth in perfume and cosmetics revenue compared to the same quarter last year.
For the third quarter of 2024, LVMH reported that Dior Sauvage remained a strong seller for the conglomerate, two years after the domestic violence trial for its longtime ambassador, Johnny Depp, became a media sensation. In August, LVMH launched a water-based version of the popular male-targeted scent. Dior also rolled out the first campaign starring Rihanna as the new ambassador for its female-targeted perfume J’adore in August. LVMH has continued to boost the fragrance offerings at its other fashion houses throughout 2024: In May, Fendi announced its expansion into fine fragrance with a launch of seven scents retailing for $330, tapping into the demand for increasingly high-end perfumes. In April, Celine launched its Zouzou scent along with hair perfume and scented body lotion versions of its existing perfumes. In addition to the beauty divisions of its fashion houses like Dior and Louis Vuitton, LVMH also owns fragrance brands such as Maison Francis Kurkdjian and Guerlain.
LVMH reported, however, that perfume brands are struggling in China due to the unofficial import market for fragrances in the region. “We need to [address the parallel market] to make sure that we are not damaging our brand equity,” said deputy finance director Cécile Cabanis.
The increase in revenue for perfume and cosmetics stands in stark contrast to the ongoing slump in luxury sales for its fashion houses, where LVMH reported a 1% decrease in revenue for the first nine months of 2024 compared to the same period in 2023. Sales for Q3 fell 5% in the fashion and leather goods division. LVMH has also seen a shuffling of its most high-profile creative directors in recent weeks: Hedi Slimane stepped down as creative director of Celine in early October, with Michael Rider quickly announced as his successor. Kim Jones announced his departure from Fendi that same month but will remain at Dior where he leads menswear.
LVMH reported that its beauty retail giant, Sephora, continues to maintain momentum across all markets. In September, however, it was reported that the company’s head of selective retailing, Chris de Lapuente, is set to leave at the end of October.
