LVMH Fashion and Leather Sales Fall 5% as China Slowdown Bites

Sales in LVMH’s fashion and leather goods business fell 5% in the third quarter, as a slowdown in demand in China dashed early hopes of a turnaround. The decline was steeper than the 1.8% analysts expected and follows the unit’s first growth in two years in the previous quarter.

Luxury Recovery Hopes Fade as LVMH’s Biggest Division Slides Again

Group organic sales rose 1% to €18.5bn, helped by strong demand for jewellery and for selective retailing, notably Sephora.

Analysts had expected a 1.3% rise. Watches and jewellery grew 6%, as did Moët Hennessy. Sales in Asia excluding Japan fell 5%, while US growth eased slightly from 6% to 5%, though credit card data from Citibank shows US luxury spending has fallen at least 4% in each of the last three months.

Louis Vuitton suffered a backlash in China this summer after suing tea brand Molly Tea for trademark infringement.

Jefferies’ James Grzinic said the incident had a fairly extreme impact on the brand’s trends there. CFO Cécile Cabanis said a one-off logistics problem also cost about one point of growth. Dior benefited from strong demand for Jonathan Anderson’s ready-to-wear lines.

LVMH’s shares are down nearly 40% this year, and its roughly €190bn market value has more than halved from its 2023 peak. Cabanis said the recovery is delayed, not impaired.