PARIS (Reuters) – LVMH reported third-quarter sales up 9% on Tuesday, below expectations, as inflation and economic turmoil dampened consumers’ appetite for high-end fashion. The French group, which owns 75 brands, including Louis Vuitton and Dior as well as the cognac Hennessy and the jeweler Tiffany, posted quarterly sales amounting to 19.96 billion euros, representing organic growth of 9%, while analysts expected an increase of 11.5% according to a Visible Alpha consensus.
The fashion and leather goods division, which houses Louis Vuitton and Dior, for its part recorded sales growth of 9%, slightly lower than the expectations of analysts who were counting on an increase of 10%.
LVMH is facing weakening demand in the United States and Europe, where rising prices have led to a slowdown in the spending trend seen since the end of the coronavirus pandemic, while the recovery in China has been uneven.
The wine and spirits business group recorded a 14% drop in turnover during the quarter, marked by a drop in demand for champagne, while demand for Hennessy cognac was affected by the environment economy in the United States in recent months.
Considered a barometer of the luxury sector, LVMH is the first group to publish its quarterly results, those of Hermes and Kering being expected on October 24.
“This appears sufficient to support the stock price, as buyers’ expectations were perhaps more muted, as suggested by the large market depreciation,” said Luca Solca, an analyst at Bernstein, noting that the company has had to face a more difficult comparison period after the good performances recorded in China, the United States and Europe a year ago.
Investors have recently lowered their expectations regarding the luxury sector and the stock market value of LVMH has fallen by around 96 billion euros since April.
The group, which established itself as Europe’s most profitable listed company more than two years ago, was dethroned by Danish drugmaker Novo Nordisk, the latter having benefited from the growth of its anti-inflammatory drug. -Wegovy obesity.
(Report by Mimosa Spencer, by Augustin Turpin, edited by Kate Entringer)
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