Fashion and Leather Goods Division Witnesses 9% Growth, Compared To 21% in the previous quarter
LVMH Moët Hennessy Louis Vuitton reported a 1% increase in revenues for the third quarter, pointing to a deceleration in its prominent fashion and leather goods division due to the challenges posed by inflation and rising interest rates affecting consumer spending.
The luxury group, home to an array of brands including Louis Vuitton, Dior, Tiffany & Co., and Sephora, disclosed group revenues reaching 19.96 billion euros for the three months ending Sept. 30. This falls short of the Bloomberg consensus estimate which stood at 21.15 billion euros.
Upon adjusting for currency variations, the group’s third-quarter revenues rose 9% compared to the previous year, showcasing a shift from the second quarter’s robust 17% organic revenue growth.
Sales in the crucial fashion and leather goods segment amounted to 9.75 billion euros for the third quarter, marking a 9% growth on a comparative basis from last year. This growth rate contrasts with the 21% surge in organic revenues seen in the second quarter and is slightly lower than the Bloomberg consensus projection of 11.2%.
Despite these numbers, LVMH retained its outlook for the upcoming year without specifying particular goals. In an official statement, LVMH remarked, “LVMH will leverage its powerful brands and the talent of its workforce to further fortify its global leadership in the luxury goods sector in 2023.”
Breaking down by category, the third quarter saw organic sales in wines and spirits decrease by 14%, while watches and jewelry grew by 3%. Perfumes and cosmetics saw a 9% increase, with selective retailing showing a significant 26% rise.
These figures are released amidst a turbulent economic climate, especially in Western nations, and complexities in the Chinese market, punctuated by declining property values, elevated youth unemployment rates, reduced export demand, and currency devaluation.
Other luxury entities, Kering and Hermès International, are scheduled to disclose their third-quarter revenues on Oct. 24.