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LVMH<\/strong>, the world’s leading luxury group, has kicked off the release of the CAC40<\/strong> earnings. While the global luxury leader announced an increase in third-quarter revenue, it still falls short of expectations.<\/p>\n <\/p>\n The French conglomerate, which owns 75 brands<\/strong>, including Louis Vuitton, Dior, Hennessy, and Tiffany, reported quarterly sales of<\/strong> \u20ac19.96 billion<\/strong>, representing organic growth (at constant exchange rates and scope) of 9%<\/strong>. Analysts were anticipating an 11.5%<\/strong> increase, according to a Visible Alpha consensus. This growth marks a significant slowdown compared to the 17%<\/strong> organic growth in the second quarter.<\/p>\n <\/p>\n Over the first nine months of the year, the world’s number one luxury company achieved a 10%<\/strong> increase in reported revenue and a 14%<\/strong> increase at constant exchange rates and scope, reaching \u20ac62.21 billion<\/strong>.<\/p>\n <\/p>\n “In an uncertain economic and geopolitical context, the group is confident in its growth trajectory,”<\/em> the company stated in a press release.<\/p>\n <\/p>\n In different regions, sales in Asia<\/strong> (excluding Japan) saw an 11%<\/strong> increase, while growth in Europe was 7%<\/strong>. These increases are relatively modest compared to the 34% and 19%<\/strong> growth seen in the second quarter (Q2). Japan experienced a 30%<\/strong> growth compared to the previous year, and the United States returned to positive territory with a 2%<\/strong> increase.<\/p>\n <\/p>\n <\/p>\n As the barometer of the luxury sector, LVMH is the first company to release quarterly results, with Hermes and Kering’s<\/strong> results expected on October 24th<\/strong>.<\/p>\n <\/p>\n Throughout the year, the group has repeatedly highlighted the “normalization” of the global luxury market after two and a half years of post-Covid recovery. However, rising interest rates and declining financial markets in the third quarter presented additional headwinds to growth.<\/p>\n <\/p>\n LVMH is now grappling with weakened demand in the United States and Europe<\/strong>, where price increases have led to a slowdown in spending observed since the end of the coronavirus pandemic. Meanwhile, the recovery in China<\/strong> has been uneven and exhibits more moderate growth.<\/p>\n <\/p>\n Nonetheless, analysts from Bernstein believe that the company’s growth aligns with investor expectations. It appears that investors have revised their forecasts downward due to the recent decline in LVMH’s price-to-earnings multiples, often referred to as “derating<\/strong>.”<\/p>\n <\/p>\n <\/p>\n In the third quarter, the Perfumes & Cosmetics<\/strong> and Watches & Jewelry<\/strong> divisions experienced a slowdown in their growth, reaching +9% and +3%<\/strong>, respectively. Sales in the Wines & Spirits<\/strong> division declined by 14%<\/strong>. This decline is due to the normalization of post-Covid demand, particularly for Hennessy cognac, as well as high inventory levels among retailers.<\/p>\n <\/p>\nPost-pandemic slowdown<\/h2>\n
Segments below expectations<\/h2>\n
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