(News Bulletin 247) – The luxury group presented its third quarter activity this Tuesday after the close. Sales reached 19.08 billion euros, marking a decline of 3% on a comparable basis.

Inaugurating the CAC 40 results season, LVMH presented its income this Tuesday after the market closed. The copy is clearly disappointing.

Over the period from July to the end of September, the number one luxury company recorded revenues of 19.076 billion euros. This reflects a decline in sales of 4.4% in published data and 3% in comparable data (i.e. excluding currency and scope effects).

According to a consensus cited by Royal Bank of Canada, analysts expected revenues to increase by 1% on a comparable basis and amount to 20.012 billion euros.

The disappointment comes for many from the company’s most important division, “fashion and leather goods”. In the third quarter, this activity saw its revenues decline by 5% on a comparable basis, thus falling into decline after increases of 2% then 1% in the first and then second quarters.

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Fall in activity in Japan

According to Royal Bank of Canada, this division clearly missed the consensus, since analysts anticipated an increase of 1% for the division on a comparable basis.

All divisions ultimately missed expectations. On a comparable basis, wines and spirits recorded a drop of 7% in their revenues in the third quarter, watches and jewelry fell by 3%, selective distribution (i.e. Sephora and “travel retail”) (i.e. sales in airports and train stations) showed growth of 2% and perfumes and cosmetics increased by 3%.

According to Royal Bank of Canada, the consensus anticipated a decline of 2% for wines and spirits, 3% for watches and jewelry, growth of 5% for perfumes-cosmetics, and growth of 5% for distribution. selective.

By region, Asia excluding Japan accentuated the decline in its activity in the third quarter (-16% on a comparable basis after -14% in the second and -6% in the first). Growth fell to 0 in the United States, Europe held up, with like-for-like growth of 2%, while Japan suffered a violent slowdown (+20%, after +57% in the second quarter). and +32%). LVMH explained that this lower growth was “essentially” explained by the rise in the yen.

Remember that LVMH’s growth in Japan in recent quarters had been driven by spending by Chinese tourists in the country, attracted by the weakness of the yen.

ADR suffers

“Overall, we believe these results will be viewed negatively by the market and indicate a more pronounced slowdown than expected,” concludes Royal Bank of Canada.

If the reaction of the Parisian market will be measured on Wednesday, the ADR (American deposit receipt), a financial instrument allowing American investors to invest in foreign groups, is suffering. Around 6:15 p.m. after the publication of these figures, this ADR fell by 6.2% on Wall Street.

The financial director, Jean-Jacques Guiony, also indicated that the corporate tax surcharge planned by the French government would have an impact of 700 million to 800 million euros. The executive said France represented around a third of the group’s pre-tax profit and around 40% of its taxes.