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Fashion & Leather Goods Generate €20,7 Billion, While Sephora Drives €8,6 Billion in Sales—Net Profit Down 14 % Amid Global Uncertainty
Sectors & Markets
14 October, 2024
Table of contents
Christian Dior Group has released its financial results for the first half of 2024, demonstrating its resilience in a challenging economic environment. Despite facing geopolitical tensions and currency fluctuations, the Group managed to sustain a stable revenue performance, marking a modest organic growth of 2% compared to the same period in 2023. The revenue for this period stood at €41,7 billion, with an organic growth of 1% in the second quarter. However, the Group faced a slight decline in reported revenue of 1% compared to the first half of 2023, when it posted €42,2 billion.
The first half of 2024 saw Christian Dior generating €10,6 billion in profit from recurring operations, an 8% decline from the same period last year. This is largely attributed to the negative effects of exchange rate fluctuations, especially in the Fashion & Leather Goods segment. The operating margin, however, remained strong at 25,6%, exceeding pre-COVID levels and showcasing the Group’s ability to maintain high profitability despite external pressures.
The net profit, Group share decreased by 14 %, amounting to €3,0 billion, down from €3,5 billion in 2023. Despite these challenges, the company’s operating free cash flow saw a remarkable increase, reaching €3,1 billion, which is a 74% improvement from the €1,8 billion reported in the previous year.
The equity of the Group also saw significant growth, rising by 12 % to €63,9 billion in the first half of 2024, compared to €57,0 billion in 2023. Meanwhile, net financial debt decreased by 2% to €12,1 billion, indicating prudent financial management and strengthening the company’s balance sheet.
Geographically, Europe and the United States showed continued revenue growth on a constant consolidation scope and currency basis, driven by strong local demand. Japan, in particular, stood out with double-digit revenue growth, fuelled by Chinese customer spending both in Japan and Europe. Meanwhile, other parts of Asia reflected strong recovery but at a more moderate pace.
Christian Dior’s business segments had varied performances:
The Wines & Spirits segment continued its post-pandemic normalisation, facing a 9 % organic revenue decline. However, a gradual recovery was observed in the United States, particularly in the Cognac market.
Christian Dior has been actively working on enhancing its environmental, social, and governance (ESG) commitments. One of the significant achievements in the first half of 2024 was the Group’s increased focus on sustainable luxury. The company has integrated sustainable practices across its value chain, from responsible sourcing of materials to energy-efficient production processes.
A key highlight was the Group’s progress in reducing its carbon footprint, aiming to achieve net-zero emissions by 2050. This ambitious goal is supported by investments in renewable energy sources for its production facilities and reducing the environmental impact of its supply chain. In addition, the Group continued to emphasise the importance of the circular economy, particularly in its Fashion & Leather Goods segment, where recycling and repurposing materials are becoming integral to product design.
Christian Dior has also been driving efforts to improve the sustainability of packaging in its Perfumes & Cosmetics segment, adopting eco-friendly alternatives and reducing plastic use. The Group aims to further reduce waste and promote the use of biodegradable materials across its product lines.
Despite facing economic challenges, Christian Dior’s financial results for the first half of 2024 highlight the Group’s resilience and ability to adapt to changing market conditions. The Group remains committed to driving growth through innovation, creative excellence, and expanding its global presence, particularly in key markets like Japan and the United States.
Looking forward, Christian Dior is confident in its strategy to enhance the desirability of its brands while maintaining a focus on sustainability and ESG goals. The Group’s future growth will likely hinge on continued investments in sustainable luxury, expanding its digital and omnichannel capabilities, and deepening customer engagement through creative marketing and store renovations.
Further analysis could explore the potential long-term impacts of currency fluctuations on the Group’s profitability, as well as the evolving geopolitical landscape's effect on luxury demand. Additionally, monitoring the performance of Christian Dior’s digital initiatives and sustainability programs will be critical to understanding the full scope of the Group’s future success.
Read the full Dior report Here.
Cover Image Courtesy: Christian Dior Finance Website