The crisis does not spare LVMH: latest quarterly figures are below expectations. Not only that. The Fashion & Leathergoods division reported a 5% drop in sales, again well below estimates. Not a minor detail: it is the first down for the French group since 2020, when the pandemic raged.
Crisis does not spare LVMH
LVMH’s total third quarter sales were 19.08 billion euros, -3% on an organic basis compared to the same period in 2023 and -9% on the second quarter 2024. This is the first decline in quarterly sales since the start of the pandemic. The figure is below the estimates of 15 analysts (gathered by Visible Alpha) who had estimated sales of 20.01 billion euros (source Ladymax). Barclays calculated a growth of 2% (source Reuters). Numbers reflecting the difficulties of luxury, when it comes to grappling with a downturn caused by – among other things – the economic slowdown in China, the uncertainty of the elections in the US. Japan also seems to have run out of momentum. LVMH’s Fashion & Leathergoods division generated sales of 9.15 billion euros (-5%). Visible Alpha’s estimates were of +1%.
The nine-month figure
During the first nine months of the year, LVMH’s total revenue amounted to 60.75 billion euros, -2% at current exchange rates compared to the same period in 2023 and stable on a comparable basis. The Fashion & Leathergoods division contributed 29.92 billion, -1% over the January-September 2023 period. According to the multinational, this division “showed good resilience and gained market share”. The note states that “Loro Piana, Loewe and Rimowa confirmed their solid momentum”, but it made no reference, however, to the performance of Louis Vuitton and Dior, LVMH’s two flagship brands. No comment was also made by the CEO, Bernard Arnault.
However, LVMH remains confident
“In an uncertain economic and geopolitical environment”, LVMH writes, “the group remains confident. It will maintain a strategy focused on continuously improving the desirability of its brands by leveraging the authenticity and quality of its products”. Words that reiterate what Arnault had said a few days ago regarding the central role of the product.
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