LVMH shares fell by 1.6 per cent. Hermès shares fell by 2.4 per cent, Kering by 2 per cent, Moncler by 1.5 per cent, Dior by 1.4 per cent and Richemont by 1.1 per cent.
On Monday, LVMH reported that organic sales in its fashion and leather goods division, which accounts for almost half of the group’s revenue, had fallen by 5 per cent. Analysts at Visible Alpha had expected a decline of just 1.8 per cent. The company attributed the results to a less favourable situation in the Chinese market, according to Investing.
Overall, LVMH’s organic sales for the third quarter rose by 1 per cent to €18.5 billion ($20.68 billion), excluding the impact of currency fluctuations. However, analysts had forecast growth of 1.3 per cent.
Growth in sales of watches and jewellery – a portfolio that includes Bulgari and Tiffany – also slowed. In the third quarter, the figure rose by 6 per cent, compared with 9 per cent in the first half of the year. This weakened one of the few segments of the luxury market that had maintained steady growth.
When asked about the prospects for Louis Vuitton’s recovery, LVMH’s Chief Financial Officer, Cécile Cabanne, stated that this would take time and that there were few quick fixes.
The Sephora chain was unaffected by the crisis
Selective retail posted the best results among the group’s divisions, with organic sales rising by 8 per cent. The Sephora chain increased its market share in a number of countries thanks to exclusive launches, including Rhode products, and also entered the Belgian and Croatian markets.
Sales of wines and spirits grew by 6 per cent on an organic basis. Champagne continued to recover, particularly in Europe, whilst Hennessy cognac performed well in Asia.
In the perfumes and cosmetics division, sales rose by 1 per cent. This growth was driven by new products, including Dior J’adore Intense and Sauvage Extrait.
It is worth noting that European luxury companies have been struggling to see a recovery in demand for around three years. Since the start of the year, their combined market capitalisation has fallen by approximately €330 billion. LVMH’s own shares have lost around 40 per cent of their value over this period.
This story was translated with the assistance of artificial intelligence.The translation was also reviewed by the Logos Press editorial team.
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