LVMH sales growth falters in third quarter
The company said it was ‘confident in the continuation of its growth’
Paris – The world’s top luxury group LVMH said Tuesday that its third quarter sales were nearly flat at 19.96 billion euros ($21.2 billion), a one percent increase from the same period last year.
The marginal third quarter sales increase pales in comparison with the double-digit increases LVMH posted in the first two quarters, but the company said that despite the “uncertain economic and geopolitical environment, the Group is confident in the continuation of its growth”.
The group, whose brands include Louis Vuitton, Dior and Tiffany, totalled 62.2 billion euros in turnover over the first nine months of the year so far.
This represents an increase of 10 percent over the same period last year.
But LVMH’s leading business group of fashion and leather goods achieved a turnover of 9.75 billion euros in the third quarter, a modest growth of 0.65 percent.
Revenue fell in the wines and spirits division — with brands including Hennessy and Moet & Chandon — by 20 percent in the third quarter to 1.5 billion euros, LVMH reported.
Sales of Hennessy in particular were “affected in the United States by the economic environment (and) the post-Covid normalisation of demand”, the group said in Tuesday’s statement.
Sales of perfumes and cosmetics in the third quarter were close to two billion euros — an increase of 1.7 percent — and benefitted from a “very selective distribution strategy”, the group said.
The watches and jewellery business was down five percent.
– Brands boost –
The group does not give details of the sales of each of its brands, but said Tuesday that fashion brand Dior had “continued to deliver remarkable growth in all its product categories”.
It also said Louis Vuitton had “delivered an excellent performance”.
LVMH also flagged its makeup and beauty retailer Sephora fas achieving “an exceptional performance” and said it had gained market share in North America, Europe and the Middle East.
The group plans to expand the brand in the United Kingdom after opening its first store this year.
The DFS duty free shops — which returned to profitability earlier this year after being impacted by the Covid pandemic — benefitted from a “gradual recovery in international travel”, the group said.
The return of tourists from “the flagship destinations of Hong Kong and Macao” was particularly helping sales, the statement added.
In July, LVMH reported that its net profits had soared by 30 percent to 8.48 billion euros ($9.34 billion) in the first half of the year, largely thanks to strong growth in Asia and Europe.
Sales at the group rose 15 percent during the January-June period compared with last year, to hit 42.2 billion euros.
The wine and spirits business line also saw a loss in the first two quarters, however, dropping four percent.