PARIS – French luxury giant LVMH reported a 3 per cent fall in third-quarter sales on Oct 15, undershooting estimates in its first decline in quarterly sales since the pandemic as demand in China and Japan weakened, likely exacerbating investor worries.
The world’s biggest luxury group generated €19.08 billion (S$27.2 billion) in revenue for the three months ending in September, a 3 per cent fall on an organic basis, stripping out the effect of currencies, acquisitions and divestitures.
The figure missed a consensus estimate of 2 per cent organic growth cited by Barclays.
The group “badly” undershot expectations, with “misses across the board,” said analyst Luca Solca at Bernstein.
The sales report, the first of the quarter from the large luxury companies, comes after a rollercoaster for luxury stocks in recent weeks, as stimulus measures in China briefly fuelled hopes of a recovery.
Chinese consumer confidence has slumped to the all-time lows of the COVID-19 era, LVMH chief financial officer Jean-Jacques Guiony said on an analyst call, though he added that the company still believed in the future of the market.
The LVMH sales, and a bigger decline at smaller Italian firm Ferragamo, will do little to steady the market.
“LVMH being the sector proxy for many, this print will inevitably cause more short-term volatility,” said Mr Flavio Cereda, co-manager of GAM’s Luxury Brands investment strategy, a fund that owns shares in luxury stocks.
Fashion, leather goods sales undershoot forecasts
The fashion and leather goods division, home to Louis Vuitton and Dior labels, reported a sales decline of 5 per cent, well below consensus expectations for 4 per cent growth, and the first fall for the business since 2020.
“The fashion division saw slight improvement with Europeans and Americans but worse performance with Chinese and Japanese,” Mr Guiony said.
Fashion
