Paris-LVMH posted subdued growth in the third quarter, with sales of jewellery and watches slowing.
Declining demand for luxury handbags and its wines and spirits weighed on results.
The luxury conglomerate noted softening luxury sales around the world, particularly in the United States and Europe.
Here are four key takeaways from the company’s latest earnings report.
LVMH posted a so-so performance in the third quarter, but saw growth in the first nine months of the fiscal year.
LVMH reported third-quarter revenue growth of 1 per cent year-on-year (9 per cent on an organic basis) to €19.96 billion ($21.14 billion).
Its fashion and leather goods division saw slower growth in the quarter, compared with a double-digit jump in Q2.
Its wine and spirits sales slumped, which it blamed on weakening post-COVID demand and a tougher US market, particularly for cognac sales.
Its balance sheet was brighter for the first nine months, with revenues up 10 per cent (14 per cent on an organic basis) to €62.21 billion ($65.9 billion).
Jewellery and watches sales stalled in Q3.
In the third quarter, sales in the Watches and Jewellery segment decreased by 5 percent to € 2.52 billion ($ 2.67 billion) on a reported basis, but increased by 3 percent on an organic basis.
For the first nine months, sales in this category totalled € 7.95 billion ($ 8.42 billion), up 5 percent (9 percent on an organic basis).
The jewellery portfolio includes Bulgari, Chaumet, Repossi, Fred and Tiffany & Co.
Following the reopening of Tiffany’s New York flagship, The Landmark, the brand continued to revamp its store network, opening two new stores in Tokyo.
Its new “Lock” collection continued its global roll-out. It also launched the second part of the “Blue Book: Out of the Blue” high jewellery collection.
Bulgari, which celebrated the 75th anniversary of its “Serpenti” collection, saw “strong growth”, LVMH said.
To mark the milestone, it held a new exhibition in Dubai, following shows in Shanghai, New York and Seoul.
Bulgari’s recently launched “Mediterranea” high jewellery collection had an “outstanding performance”, LVMH said.
Chaumet held its retrospective exhibition “A Golden Age: 1965-1985” at its 12 Vendôme location in Paris, while Fred unveiled “Audacious Blue”, the brand’s first lab-grown blue diamonds.
Both brands experienced strong growth, the company said.
On the watch side, TAG Heuer opened a flagship store in New York, while Hublot was the official timekeeper for the FIFA Women’s World Cup in Australia.
Zenith launched its limited edition “Defy Chroma” collection.
Sales growth in the US was also subdued.
US sales increased by 2 percent in the third quarter and by 3 percent in the first nine months on an organic basis.
The US is LVMH’s second largest market in terms of sales, after Asia.
The US accounted for 24% of sales, down from 26% in the previous nine-month period.
For the first nine months, LVMH reported double-digit organic growth in Europe, Japan and the rest of Asia.
LVMH remains tight-lipped about its financial future.
As in previous quarters, the company did not provide a financial forecast for the coming year, stating only: “In an uncertain economic and geopolitical environment, the group is confident of continuing its growth and will maintain a strategy focused on continuously enhancing the desirability of its brands, based on the authenticity and quality of its products, excellence in distribution and an agile organisation”.
As for its future plans, the company said it would rely on the strength of its brands and the talent of its people to strengthen its leadership position in the luxury goods market.
