LVMH reports muted growth in Q3 with slow jewelry sales. Weak demand for luxury handbags and wine and spirits weighed on the results. The luxury conglomerate observed a softening trend in luxury sales globally, with a particular focus on the United States and Europe.
In the third quarter, LVMH reported a 1 percent year-over-year revenue growth (9 percent on an organic basis), totaling €19.96 billion ($21.14 billion). The fashion and leather goods division experienced slower growth in the quarter compared to its double-digit increase in the second quarter.
Wine and spirit sales declined, attributed to reduced demand post-COVID and a challenging U.S. market, especially for cognac sales.
However, the company's financial performance was more favorable for the first nine months, as revenue increased by 10 percent (14 percent on an organic basis) to €62.21 billion ($65.9 billion).
Q3 Jewelry And Watch Sales Weakened
In the third quarter, the watches and jewelry segment reported a 5 percent year-over-year decline in revenue to €2.52 billion ($2.67 billion) on a reported basis but showed a 3 percent increase on an organic basis. Over the first nine months, the category's revenue reached €7.95 billion ($8.42 billion), marking a 5 percent growth (9 percent on an organic basis).
LVMH's jewelry portfolio encompasses renowned brands like Bulgari, Chaumet, Repossi, Fred, and Tiffany & Co. Following the reopening of Tiffany's flagship store in New York, known as "The Landmark," the brand continued its store network enhancement by opening two new stores in Tokyo. The "Lock" collection and the second part of the "Blue Book: Out of the Blue" high jewelry collection were launched globally.
Bulgari celebrated the 75th anniversary of its iconic "Serpenti" collection, witnessing strong growth. The brand showcased its milestone with exhibitions in various locations, including Dubai, Shanghai, New York, and Seoul. The recently introduced "Mediterranea" high jewelry collection by Bulgari received outstanding acclaim.
Chaumet hosted the "A Golden Age: 1965-1985" retrospective exhibition at its 12 Vendôme location in Paris, while Fred introduced "Audacious Blue," featuring the brand's first lab-grown blue diamonds. Both brands experienced robust growth during this period.
In the realm of watches, TAG Heuer inaugurated a flagship store in New York, and Hublot served as the official timekeeper for the FIFA Women's World Cup in Australia. Zenith launched its limited-edition "Defy Chroma" collection.
Muted Sales Growth In The United States
In the third quarter, U.S. sales showed a modest 2 percent increase, and over the first nine months, they saw a 3 percent growth on an organic basis. The United States stands as LVMH's second-largest revenue-generating market, trailing only Asia.
The U.S. market contributed 24 percent of the company's revenue, slightly down from the previous first nine months when it accounted for 26 percent. In the first nine months, LVMH reported double-digit organic growth in Europe, Japan, and the rest of Asia.
LVMH Maintains Silence Regarding Its Financial Future
Similar to previous quarters, LVMH refrained from offering fiscal guidance for the upcoming year. Instead, the company expressed confidence in its sustained growth, emphasizing a strategy centered on continuously enhancing brand desirability, grounded in product authenticity and quality, superior distribution, and agile organization, all within an uncertain economic and geopolitical context. Regarding future plans, LVMH stated its intention to harness the strength of its brands and the capabilities of its workforce to reinforce its leading position in the luxury goods market.