LVMH’s Fashion and Leather Goods Sales Fall 5% in Third Quarter
Weak Chinese consumer demand weighs on the luxury group as its fashion and leather goods division records a sharper than expected decline.
LW Desk
LVMH, the world’s largest luxury goods group, reported weaker than expected organic sales growth in the third quarter, as declining demand in China weighed on its fashion and leather goods business, including Louis Vuitton and Dior.
The group’s organic revenue increased 1% year-on-year to €18.5 billion, excluding currency movements. However, this fell short of analysts’ expectations of 1.3% growth, highlighting the continuing challenges facing the global luxury market.
LVMH’s fashion and leather goods division, which accounts for nearly half of the group’s revenue, recorded a 5% decline in organic sales. The drop was significantly steeper than the expected 1.8% contraction, reflecting continued pressure on luxury fashion demand.
Weakness was particularly evident in Asia, where sales fell 5% year-on-year, largely reflecting deteriorating consumer sentiment in China. In contrast, sales in the United States increased 5%, offering some support to the group’s overall performance.
Chief Financial Officer Cecile Cabanis said Chinese consumer sentiment had weakened sharply during the quarter, affecting discretionary spending across the region.
Luxury brands are also facing additional pressure from China’s tax crackdown on wealthy individuals, alongside uncertainty surrounding the Iran war and signs of slower consumer spending in the United States.
LVMH’s latest results add to concerns about the recovery of the global luxury goods industry, which has struggled with a prolonged slowdown. The performance of its fashion and leather goods division will remain an important indicator of demand conditions for premium leather products and luxury fashion worldwide.
