Luxury giant LVMH’s third-quarter sales up by 20%

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PARIS, Oct 12 (Businesshala) – Sales of French luxury group LVMH’s fashion and leather goods division (LVMH.PA) grew strongly in the third quarter, even as overall revenue growth in Asia and the United States outperformed their first-half performance. decreased.

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LVMH, whose luxury products span Moët & Chandon champagne and Bulgari timepieces, said Tuesday that the popularity of its star labels Louis Vuitton and Dior helped its fashion and leather goods division, which accounts for nearly half of the group’s sales. share, to register a growth of 24%.

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Revenue for this business at quarter-end was up 38% from their pre-pandemic, 2019 levels, which were similar to those in the first half.

The luxury goods industry has made a strong comeback from the health crisis, even though international travel, a key growth driver in pre-pandemic times, has not fully resumed.

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LVMH chief financial officer Jean-Jacques Gioni said revenue growth in Asia was under pressure in August due to the partial re-imposition of anti-coronavirus restrictions in some countries, but added that the group was looking at changes in consumer behavior in China. Haven’t seen.

A call by Chinese President Xi Jinping in August for “common prosperity” and a redistribution of wealth had prompted investors to worry that Beijing might promote measures aimed at bridging the country’s wealth gap, the world’s largest. could curb high-end consumption in the U.S.’s largest luxury market.

“We see no reason why this could be detrimental to the upper middle class who make up the bulk of our customer base,” Guoni said.

Bernstein analyst Luca Solca was positive on strong revenue performance in the fashion and leather goods business.

“We believe that this should come as a relief to investors, especially after volatility in the sector in August and doubts over sugar demand trends and even though other divisions have been able to increase their earnings in Q3 as compared to 2019. reduce growth.”

The company’s performance showed a marked improvement in Europe in the third quarter, even without visitors from Asia, as local travel resumed in the summer.

LVMH reported revenue growth of 28% in the United States, compared to 70% in the first six months of the year, growth of 60% in the first half of the year, and 12% in Asia, excluding Japan.

Guoni said the group did not have supply chain issues as its manufacturing is largely based in Europe and also allayed concerns about rising shipping costs, noting that the group has enough margin to cope. .

Overall similar sales, excluding the impact of foreign currency fluctuations, rose 20% to 15.51 billion euros ($17.90 billion) in the three months to September.

Growth was roughly in line with an analyst consensus forecast for 21% growth.

Gioni said the company will continue to focus on broadening the appeal of its blockbuster acquisition, US jeweler Tiffany’s, by refocusing its product assortment and ongoing marketing efforts.

LVMH is rebranding Jeweler to appeal to younger consumers, presenting a campaign starring Beyoncé and Jay-Z on digital billboards in New York City’s Times Square and creating social media buzz with K-pop star Rose Is.

($1 = 0.8664 Euro)

Reporting by Mimosa Spencer, Editing by Sylvia Alosi and Jane Merriman

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