LVMH’s third quarter revenues rose 20 percent on an organic basis to €19.8 billion ($19.3 billion). The group’s fashion and leather goods division, including profit centre Louis Vuitton, grew 22 percent, reflecting enduring demand for luxury goods in the face of high inflation and slower macro-economic growth.

Growth in the important US market, however, fell to half the rate of the previous quarter, with sales rising 11 percent over the summer compared to a 22 percent jump in Q2.

Explosive growth in the US has powered luxury’s recovery from the effects of the pandemic. Despite rampant inflation and rising interest rates that are dampening economic sentiment in the country, the owner of brands including Louis Vuitton and Dior says demand for its products is holding up among Americans, but simply shifting to Europe as long-haul travel resumes.

“We had a very good level of business with Americans but the way it spread between the domestic and tourist market was entirely different,” chief financial officer Jean-Jacques Guiony said Tuesday in a call with analysts after Paris markets closed. “A good part of the business is taking place in Europe as Americans tend to take advantage of the strong dollar.”

In July, the value of the euro slipped below the US dollar for the first time in two decades, driving down the price of luxury purchases made on trips to shopping capitals like Paris and Milan.

Overall, LVMH’s sales beat most analyst expectations as sales turned positive again in the key Chinese market. Sales in Asia (excluding Japan) rose 6 percent year-on-year after shrinking 8 percent in the second quarter, when sweeping lockdowns in population centres like Shanghai hammered sales.

The company is still rebounding from the impact of China’s strict pandemic measures. “We can’t really talk about a recovery,” Guiony said. “Things are better than during [the second quarter] but they are not back to normal. The level of traffic in stores is nowhere near what it was in 2019.”

Guiony declined to comment on expectations for policy announcements from China’s quinquennial conference at the end of the month, but said he expected the market to recover soon. “Things could bounce back quite quickly,” he said.

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