More China (and Asia: +34%) and less USA (-1%). Sales of fashion and leather goods, however, grew at a vertiginous pace: +21% from April to June 2023 compared to Q2 2022. In the first quarter, growth had been 18%. Louis Vuitton, Christian Dior, Celine, Loro Piana, Loewe and Marc Jacobs were the best performing brands. Moral: LVMH’s hegemony shows no sign of abating.
Fashion and leather goods are worth 21 billion
LVMH’s Fashion & Leather Goods division recorded a 20% organic growth during the first semester of 2023. Revenue reached 21.1 billion euro, pretty much half of the group’s overall amount. During Q2 revenue increased by 21% on comparable basis. A percentage slightly higher than the analysts’ forecast of +20%, cited by Reuters.
Quarterly results
Overall sales for LVMH during the second quarter were 21.2 billion, with a 17% increment thanks to China, which offset the decrease in the USA. This increase was slightly higher than analysts’ expected +16%, according to Visible Alpha’s consensus. During the semester, total revenue was 42.2 billion euro, up 17% on comparable basis.
Very satisfied with China
During the conference call with analysts, LVMH’s CFO Jean-Jacques Guiony has said to be very “satisfied” with the performance of China. Chinese consumers continue to buy more and more outside of their country, but still in Asia. Europe is experiencing a gradual return of Chinese wealthy consumers, but today it’s not possible to see when they will come back in force in Paris and Milan (source Bloomberg).
What’s happening in the USA
Guiony explained that the slowdown of the USA (only market down) has particularly hit aspirational clients, as they spent less on entry-level products. An aspect that is especially visible in smaller cities. Online sales also lost ground.
Revenge buying is over
“The global mood – commented Guiony – isn’t revenge buying, which we saw in 2021 and 2022. Now we are discussing normalization more than anything”. A comment that found a consensus with many analysts, as they see luxury becoming stable, after years of stellar growth. Simply put: demand is normalizing after the post-pandemic euphoria.
In photo from louisvuitton.com, the last campaign for Capucines Bag by Louis Vuitton, with Zendaya
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