Fragrances, cosmetics and Sephora drive LVMH gross sales within the third quarter

The world’s largest luxurious items firm LVMH stated Tuesday, October 15, that its third quarter gross sales fell 4.4 p.c to 19 billion euros amid a worldwide slowdown within the sector.

“Within the third quarter, the slight decline in income primarily arose from decrease progress seen in Japan, primarily as a result of stronger yen,” the corporate stated in a press release.

For the primary 9 months of the yr, gross sales fell 2 p.c to 60.75 billion euros, “following a number of years of outstanding post-Covid progress.”

“In an unsure financial and geopolitical surroundings,” LVMH “stays assured” and intends “to bolster its world management place in luxurious items,” the group provides.

In a context of declining gross sales for the group’s major divisions within the third quarter (-5% for trend and leather-based items; -7% for wines and spirits; -4% for the watches and jewellery division), gross sales of the selective retailing division (Sephora, DFS, and so on.) reached 3.93 billion euros (+2% in comparison with the identical interval final yr), whereas gross sales of perfumes and cosmetics elevated by 3% over the identical interval, exceeding 2 billion euros.

“Sephora carried out remarkably nicely and continued to achieve market share in North America, Europe and the Center East,” commented LVMH.

As for the perfumes and cosmetics division, which achieved natural income progress of 5% within the first 9 months of 2024, LVMH praises a “robust innovation technique ” and a ” extremely selective distribution coverage.”

Nevertheless, the speed of natural progress of the perfumes and cosmetics division has slowed all year long thus far, with Q1 increasing at 7%, Q2 rising 4% and Q3 rising 3%.

The group “badly” undershot expectations, with “misses throughout the board”, stated analyst Luca Solca at Bernstein.

The final slowdown hasn’t come as a shock, comes as no shock to Hargreaves Lansdown mentioning that “LVMH isn’t the one luxurious identify feeling the ache.”

Because the post-pandemic spending spree has misplaced momentum, China’s property disaster has weighed on consumers’ confidence. Gross sales of luxurious items are struggling worldwide, significantly as a result of weak demand in China. Hopes that latest stimulus measures announce by the Chinese language authorities, might rapidly reignite enthusiasm for high-end merchandise have but to be fulfilled.