- Group organic revenue up 14% in the first nine months of the year
- Biggest division, Fashion & Leather Goods up 16%
- Selective Retailing strongest performer, helped by Sephora demand
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown:
“LVMH has provided another solid performance, with year-to-date revenue growth jumping 14%. Fashion & Leather Goods – the group’s biggest moneymaker, is benefitting from increased demand. In the face of a tough global economic outlook, Louis Vuitton, Dior and Marc Jacobs customers are able to keep spending with abandon. There was an especially strong performance from makeup favourite, Sephora, which helped add some shine to the Selective Retailing division. Today’s beauty-conscious, social-media-ready culture is playing into LVMH’s well-preened hands. While performance has been very polished overall, the outlook is potentially far less appealing, and growth has moved down a gear.
The luxury sector is one that markets have been incredibly excited about, largely thanks to the resilience of the customer base and its counter-inflationary properties. While there may be great expectations, there is also the potential for great disappointment. Chinese consumers aren’t necessarily poised to prop up earnings as they have done in the past, with slower economic growth and an underwhelming tapering of post-pandemic activity, rather than the rocket to the moon some were hoping for. European and American consumers are also normalising their spend which leaves a gap to be traversed. Heading into Christmas, these are trends that will need to be closely monitored.
Longer-term the sector has a great deal of potential and further upside on the table, but within that, the shorter-term demand outlook leaves room for tripwires.
