LVMH‘s third-quarter revenue declined, which the company attributed to Japan’s stronger yen and China’s weak consumer confidence.
The luxury retailer’s sales slid 3 per cent to €19.08 billion ($20.78 billion), with wines and spirits decreasing 7 per cent to €1.38 billion ($1.5 billion).
Fashion and leather goods fell 5 per cent to €9.15 billion ($9.96 billion), while watches and jewellery dropped 4 per cent to €2.39 billion ($2.6 billion).
“The fashion division saw a slight improvement with Europeans and Americans but worse performance with Chinese and Japanese,” said Jean-Jacques Guiony, CFO of LVMH, in an analyst call.
However, Guiony said LVMH still believes in the future of the luxury market despite consumer confidence in China plunging to pandemic-era lows.
Meanwhile, perfumes and cosmetics grew 3 per cent to €2.01 billion ($2.19 billion), and selective retailing rose 2 per cent to €3.93 billion ($4.28 billion).
Piral Dadhania, an RBC analyst, said that there would be a “more pronounced slowdown than expected” as the market will likely view the results negatively.
UBS forecasts the third quarter will be the worst for the luxury sector in four years, with organic sales dropping 1 per cent year over year.
- Additional reporting from Reuters
