Luxury goods bellwether LVMH (LVMH.PA) reported a 9% rise in third quarter revenue on Tuesday, marking slower growth as strong wave of post-pandemic spending eases up amid a backdrop of rising inflation and economic turbulence.
LVMH, which owns labels including Louis Vuitton, Dior, Tiffany and Bulgari, said that revenue came to 19.96 billion euros ($21.16 billion), up 9% year-on-year, stripping out the effect of currency fluctuations and acquisitions. Total revenue rose 1% year-on-year.
That was slightly below a Visible Alpha consensus for 11.5% growth.
The fashion and leather goods division, home to Louis Vuitton and Dior, recorded sales growth of 9%, compared to analysts' expectations for 10% growth.
LVMH is facing slowing demand for high end goods in the United States and Europe, where rising prices have prompted shoppers — especially younger generations — to pull back from a post-pandemic spending euphoria, while the recovery in China has been uneven.
The wines and spirits division posted a 14% revenue decline over the quarter, with the company flagging less demand for Champagne over the period, while demand for Hennessy cognac has been affected by the economic environment in the United States in recent months.
LVMH is the first major global luxury firm to report earnings this quarter and gives investors an insight into what to expect from rivals. Hermes and Kering report on Oct. 24.
"This seems good enough to support the share price, as buyside expectations were possibly more muted, as the significant market derating suggests," said Luca Solca, analyst with Bernstein, noting the company faced a tougher comparison period following strong performances in China, the United States and Europe a year ago.
Investors have recently lowered their expectations for the luxury sector and around 96 billion euros has been knocked off the value of LVMH since April.
The French luxury group was last month unseated as Europe's most valuable listed company after a 2-1/2 year long reign by Danish drugmaker Novo Nordisk (NOVOb.CO) NOVOb.CO, which was boosted by the growth of anti-obesity drug Wegovy.
($1 = 0.9433 euros)
