LVMH sales weaken as Chinese demand hits Louis Vuitton and Dior

what happened

According to Newsmetry API, luxury-goods leader LVMH posted weaker-than-expected organic sales growth for the third quarter. Organic revenue increased 1% from a year earlier to €18.5 billion ($20.65 billion), below the 1.3% rise forecast in a Visible Alpha consensus. The group said business activity in China was less “buoyant”, while the United States, Europe and Japan continued to record “good growth”.

Organic sales in the fashion and leather goods division, which produces nearly half of group revenue, fell 5%, compared with analysts’ expected decline of 1.8%. The unit is led by Louis Vuitton and Dior, with Louis Vuitton remaining LVMH’s largest brand. In China, the label has faced criticism over a copyright dispute with tea chain Molly Tea, whose logo resembled the floral design on Louis Vuitton’s signature monogram handbags. The dispute attracted negative attention on social media.

European luxury groups have lost about €330 billion in market value since the beginning of the year, while LVMH has lost roughly 40% of its value. The $350 billion sector has been caught in a three-year slowdown. Luxury companies are also dealing with China’s tax crackdown on wealthy individuals, the fallout from the Iran war and signs of weaker US consumer spending. The exchange-rate reference in the report was $1 = 0.8960 euros.

why it matters

LVMH’s update adds to investor concerns that luxury demand may not regain its previous momentum quickly. It was the first major company to report third-quarter results, making the figures an early gauge for the wider sector.

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