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LVMH Eases Fears of a Luxury Slowdown in China

LVMH posted a 9 percent rise in fourth-quarter comparable sales, in line with forecasts, despite concerns over a slowdown in China.
Louis Vuitton store | Source: Shutterstock
By
  • Bloomberg

PARIS, France — LVMH eased fears that an economic slowdown in China would hit sales of luxury items, reporting accelerating global demand for the French conglomerate's fashion and leather goods.

Fourth-quarter sales rose 9 percent on an organic basis, the maker of Louis Vuitton bags and Dom Perignon Champagne said Tuesday after Paris markets closed. Analysts had predicted 8.7 percent growth.

Meanwhile, wine and spirits division saw "good momentum" in China and growth in Europe, US, despite supply constraints.

Key Insights

  • LVMH's update shows that luxury continues to diverge from other industries getting hurt by fallout from China's slowdown and the trade war with the US.
  • Sales in the fashion and leather-goods division led the way for the French giant, rising 17 percent. The division is a bellwether for luxury rivals such as Gucci owner Kering SA, Prada SpA and Salvatore Ferragamo SpA.
  • LVMH's report follows a buoyant update earlier this month from Richemont, which said that Chinese shoppers were buying more luxury watches. Swiss timepiece exports fell in December, however, in a worrying sign for the future.

Market Reaction

  • LVMH shares rose 0.4 percent to 259.75 euros during the Paris trading session, before the report. They rose 5.2 percent last year, compared with a decline of 13 percent for the S&P Global Luxury Index.

By Robert Williams; editors: Eric Pfanner, John J. Edwards III and John Lauerman.

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State of Fashion 2023
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State of Fashion 2023