In the third quarter, LVMH experienced a softening of sales growth, indicating a shift in consumer behavior with reduced spending on high-end items like Cognac and luxury handbags. This trend signifies a gradual decline in the post-pandemic luxury boom.
LVMH, the French conglomerate, announced a 9% increase in organic revenue for its essential fashion and leather goods unit, home to iconic brands such as Louis Vuitton and Christian Dior. However, this figure fell short of analysts’ expectations, who had predicted an 11.2% increase. Sales in the wines and spirits unit fared even worse, plummeting by 14%, surpassing negative expectations.
Despite being a long-standing favorite among investors, LVMH Moet Hennessy Louis Vuitton SE has lost some of its shine as China’s economic recovery disappoints, and demand from US consumers cools. In the previous month, the luxury giant yielded its title as Europe’s most valuable company to pharmaceutical company Novo Nordisk A/S.
Shares of the parent company of Tiffany & Co. declined by nearly one-fifth from a record high in April. Nevertheless, they still maintain a 7.9% increase for the year.
In summary, the LVMH Group reported a 9% organic revenue growth, which fell short of market estimates. LVMH is widely regarded as an industry benchmark for the luxury sector, with rivals like Hermes International and Kering SA (owner of Gucci) scheduled to report their financial results later this month.