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LVMH – revenue growth, share price decline

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Luxury goods market leader LVMH said its revenue rose 9 percent in the third quarter of 2023 – the smaller increase indicates the big wave of post-pandemic spending is fading due to rising inflation and economic turmoil, Reuters reported. In turn, CNN’s website indicated that LVMH shares fell by as much as 8 percent on Wednesday, as revenue growth was much slower than in the first half of the year.

LVMH – the owner of brands such as Louis Vuitton, Dior, Tiffany and Bulgari – reported that revenues amounted to EUR 19.96 billion, an increase of 9%. year to year, after eliminating the impact of fluctuations exchange rates and acquisitions. Total revenues increased by 1%. Every year. The fashion and leather goods division, which includes Louis Vuitton and Dior, saw sales rise 9%, compared with analyst expectations of 10%. – reported Reuters Agency.

– After three outstanding years, growth is approaching a level that is closer to the historical average – said Jean-Jacques Guiony, chief financial officer of LVMH, as quoted by Reuters.

Demand for luxury goods is falling

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She added that LVMH is facing a slowdown in demand for high-end goods in the United States and Europe, where rising prices have prompted buyers – especially younger generations – to step back from post-pandemic spending euphoria, while a recovery in China it was uneven.

LVMH is the first major global luxury company to report earnings this quarter, giving investors a glimpse of what to expect from rivals. Hermes and Kering will publish their reports on October 24.

Investors have recently lowered their expectations for the luxury sector, with LVMH’s value falling by around €96 billion since April. The French luxury goods group was last month knocked out of the position of the most valuable listed company in Europe after 2.5 years of rule, and the new leader became the Danish drugmaker Novo Nordisk NOVOb.CO, Reuters reported.

Main photo source: Shutterstock

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