LVMH shares hit as revenue growth slows
LVMH has reported revenue growth of 10% to £53.7 billion (€62.2 billion) for the first nine months of 2023, but the slow-down in growth in the most recent quarter has hit its share price.
For the third quarter, the luxury group saw revenue rise 9% to £17.1 billion (€19.9 billion) and shares dropped by around 6% in early trading today in response.
All business groups reported revenue growth over both periods, with the exception of wines and spirits, faced with a high basis of comparison.
“After three roaring years, and outstanding years, growth is converging toward numbers that are more in line with historical average", said LVMH chief financial officer Jean-Jacques Guiony, suggesting the post-pandemic spending boom is easing off.
During the nine months, the fashion and leather goods business saw revenue increase 11% to £26.6 billion (€30.9 billion), helped by an "excellent performance" from Louis Vuitton. However the group said it had seen slowing demand for luxury goods in the United States and Europe, where rising prices have led to shoppers pulling back on spend, while recovery in China was uneven.
The watches and jewellery business recorded revenue growth of 5% to £6.8 billion (€7.9 billion), boosted by Tiffany & Co, TAG Heuer and Chaumet.
The perfumes and cosmetics business achieved revenue growth of 8% to £5.1 billion (€6 billion), driven by "powerful innovative momentum". It was also supported by Christian Dior, Givenchy, Benefit Cosmetics and Guerlain.
The selective retailing business reported revenue up 23% to £10.7 billion (€12.4 billion), with Sephora performing "exceptionally well".
Looking ahead, in an uncertain economic and geopolitical environment, LVMH said it remains "confident" in the continuation of its growth.
The group will maintain a strategy focused on "continuously enhancing the desirability of its brands, drawing on the authenticity and quality of its products, excellence in distribution and agile organisation".
This slow down in growth also hit the shares of rival Kering and Richemont this morning.
