De­spite China Wor­ries, LVMH Steams Ahead

Sales of fash­ion and leather goods ad­vanced 14 per­cent in or­ganic terms in the third quar­ter and the group reaf­firmed its out­look.

WWD Digital Daily - - News - BY JOELLE DIDERICH

PARIS — LVMH Moët Hen­nessy Louis Vuit­ton posted a solid per­for­mance in the third quar­ter, led by its key fash­ion and leather goods divi­sion, against a back­drop of per­sis­tent con­cerns over a slow­down in China, which ac­counts for roughly one-third of the world’s lux­ury sales.

The par­ent of brands in­clud­ing Louis Vuit­ton, Dior, Guer­lain and Bul­gari said rev­enues rose 10 per­cent to 11.38 bil­lion eu­ros in the third quar­ter. This rep­re­sented or­ganic growth of 10 per­cent, ver­sus the 11 per­cent pro­gres­sion recorded in the sec­ond quar­ter.

The world’s largest lux­ury group kept its out­look un­changed. “In an un­cer­tain geopo­lit­i­cal and mone­tary con­text, LVMH will con­tinue to be vig­i­lant,” it said in a state­ment. “LVMH will rely on the power of its brands and the tal­ent of its teams to fur­ther ex­tend its global lead­er­ship in the lux­ury mar­ket in 2018.”

Sales of fash­ion and leather goods ad­vanced 14 per­cent in or­ganic terms in the third quar­ter. This com­pared with 13 per­cent or­ganic rev­enue growth in the sec­ond quar­ter of this year and with a 14 per­cent in­crease in the third quar­ter of 2017.

The sec­tor’s per­for­mance in the first nine months of the year was driven by Louis Vuit­ton, its largest and most prof­itable brand.

The group un­der­lined the “ex­cel­lent re­cep­tion” of the last two women’s wear and men’s wear fash­ion shows, de­signed by Nico­las Gh­esquière and Vir­gil Abloh, re­spec­tively. Vuit­ton re­cently launched a global fra­grance cam­paign fea­tur­ing Emma Stone, di­rected by Sam Men­des.

The brand said in May it had re­newed Gh­esquière’s con­tract as artis­tic di­rec­tor of women’s col­lec­tions. In an ap­pear­ance on the French tele­vi­sion pro­gram “Quo­ti­dien” last week, Gh­esquière said his new con­tract was for an­other five years and al­lowed him to launch his own brand – though he de­clined to pro­vide any fur­ther de­tails.

Chris­tian Dior, con­sol­i­dated since the sec­ond half of 2017, posted an “ex­cel­lent” per­for­mance in the first nine months of the year, the group said. It added that the first run­way show by Hedi Sli­mane for Ce­line, which po­lar­ized crit­ics dur­ing Paris Fash­ion Week, “was a great suc­cess and cre­ated enor­mous res­o­nance.”

Watches and jew­elry recorded or­ganic growth of 10 per­cent in the third quar­ter, while per­fumes and cos­met­ics were up 11 per­cent. Se­lec­tive re­tail­ing rose 5 per­cent, while rev­enues for wines and spir­its grew by 7 per­cent.

The lux­ury goods sec­tor is on alert for signs of a slow­down in de­mand from Chi­nese shop­pers, amid tougher com­par­a­tives and on­go­ing un­cer­tain­ties about trade ten­sions with the United States.

Shares of high-end brands fell sharply in Europe and Asia last week as Chi­nese of­fi­cials stepped up ef­forts to crack down on daigou shop­pers dur­ing the Golden

Week hol­i­day, seen as a prime time for those in­tent on bring­ing home goods from abroad for re­sale. LVMH’s stock price ended the week down 6 per­cent.

Roge­rio Fu­ji­mori, an­a­lyst at RBC Cap­i­tal Mar­kets, branded LVMH’s third-quar­ter re­sults “re­as­sur­ing,” not­ing that fash­ion and leather goods sales were ahead of con­sen­sus. “All in all, this was an­other strong quar­ter from LVMH, with fash­ion and leather goods stand­ing out thanks to LV and Dior,” he said in a re­search note.

LVMH was sched­uled to hold a con­fer­ence call for an­a­lysts on Wed­nes­day. Ri­val group Ker­ing is due to pub­lish third-quar­ter re­sults af­ter the mar­ket closes on Oct. 23, with Her­mès In­ter­na­tional to fol­low on Nov. 7.

Looks from the Louis Vuit­ton spring show.

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