In the third quarter of this year, LVMH, the renowned luxury goods conglomerate, faced a notable deceleration in sales growth, signaling a decline in the post-pandemic luxury boom. The decrease in consumer spending on high-end products, including Cognac and luxury handbags, has contributed to this slowdown.

LVMH’s fashion and leather goods unit, encompassing prestigious brands like Louis Vuitton and Christian Dior, witnessed a 9% increase in organic revenue during this period. Although this growth is commendable, it fell short of analysts’ predictions of an 11.2% rise. On the other hand, the wines and spirits unit experienced a significant decline of 14% in sales, surpassing negative expectations.

Previously favored by investors, LVMH Moet Hennessy Louis Vuitton SE has lost some of its allure due to China’s lackluster recovery and declining demand from US consumers. Consequently, LVMH has conceded its position as Europe’s most valuable company to pharmaceutical firm Novo Nordisk A/S, marking a substantial shift in the business landscape.

Despite a 20% drop in LVMH shares since their peak in April, they have still managed to maintain a 7.9% increase throughout the year. However, it is worth noting that the group’s overall organic revenue growth of 9% also missed estimates. As LVMH sets the tone for the luxury sector, the performances of rival companies such as Hermes International and Kering SA, which owns Gucci, will be closely monitored as they report their earnings later this month.

To summarize, LVMH’s sales growth has experienced a slowdown as global luxury demand cools down. This decline suggests a fading post-pandemic luxury boom. With the fashion and leather goods unit failing to meet analysts’ expectations and the wines and spirits unit facing a significant decline, LVMH has lost its position as Europe’s most valuable company. The upcoming earnings reports of LVMH’s rivals in the luxury sector will reveal how they fare in light of these circumstances.

Please find below two useful links:
Link 1: Reuters – LVMH Q3 Sales Rise, but Fashion and Leather Brands Disappoint

Link 2: Forbes – LVMH Q3 Earnings: O.E. Growth Misses Estimates as Louis Vuitton, Dior Underwhelm