LVMH Sales Growth Slows as China Demand Remains Weaker

what happened

According to Newsmetry API, LVMH, the world’s largest luxury group, posted third-quarter revenue of 18.50 billion euros ($20.72 billion). Organic sales increased 1% from a year earlier, slowing from 3% growth in the second quarter. The result matched analysts’ expectations, based on a Visible Alpha poll.

The fashion and leather-goods division, which includes Louis Vuitton and Dior, reported a 5% year-on-year sales decline to 8.245 billion euros. Analysts had expected revenue of 8.40 billion euros. Watches and jewelry sales rose 6%, as did wines and spirits. Perfumes and cosmetics increased 1%, while selective retailing advanced 8%.

LVMH said business activity was affected by a “less buoyant” environment in China, while the United States, Europe and Japan delivered good growth. The group also described the economic and geopolitical backdrop as uncertain and said it would focus on strengthening brand desirability.

why it matters

The slowdown and decline in LVMH’s core fashion division suggest that the long-awaited recovery in Europe’s luxury-goods market remains uneven. China’s softer backdrop is a key sector concern.

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