Luxury / news
LVMH logs weaker-than-expected Q3 as fashion and leather sales fall 5%
The world's largest luxury group posted 1% organic sales growth for the third quarter, missing analyst expectations, as demand weakened for its biggest fashion and leather brands.
LVMH said organic sales, which strip out currency swings, rose 1% year-on-year to €18.5 billion ($20.65 billion) in the third quarter. Analysts polled in a Visible Alpha consensus had expected a 1.3% increase.
The fashion and leather goods division, which generates nearly half of group revenue, recorded a 5% decline in organic sales. That was steeper than the 1.8% drop analysts had anticipated, with demand softening for labels including Louis Vuitton and Dior.
Europe's leading luxury groups have collectively lost around €330 billion in market value since the start of the year, according to the figures, with LVMH alone shedding roughly 40% of its value.
A tax crackdown on wealthy individuals in China has become the latest pressure point for luxury brands, which are already contending with the fallout from the Iran war and signs of slowing consumer spending in the United States.
Louis Vuitton dominates the group's fashion and leather division and remains by far its biggest brand. The label has drawn a backlash in China over a copyright dispute with tea chain Molly Tea, which used a logo resembling the floral motif on Louis Vuitton's signature monogram handbags, prompting criticism on social media.
LVMH was the first major company to report third-quarter results, and the trading update looked likely to further unsettle investors amid fears that the $350 billion luxury sector, mired in a three-year slowdown, will struggle to regain its former momentum.