LVMH shares fall as revenue growth slows

LVMH has reported revenue growth of 10% to £53.7 billion (€62.2 billion) for the first nine months of 2023, but the slow-down in growth in the most recent quarter has hit its share price.

For the third quarter, the group saw revenue rise 9% to £17.1 billion (€19.9 billion) and shares dropped by around 6% in early trading today in response.

All business groups reported revenue growth over both periods, with the exception of wines and spirits, , faced with a high basis of comparison.

"After three roaring years, and outstanding years, growth is converging toward numbers that are more in line with historical average", said LVMH Chief Financial Officer Jean-Jacques Guiony, suggesting the post-pandemic spending boom is easing off.

During the nine months, the perfumes and cosmetics business achieved revenue growth of 8% to £5.1 billion (€6 billion) for the first nine months. This was driven by "powerful innovative momentum", as well as growth at Christian Dior, Givenchy, Benefit Cosmetics and Guerlain.

The selective retailing business reported revenue up 23% to £10.7 billion (€12.4 billion), primarily boosted by growth at Sephora.

The beauty retailer's distribution network continued to expand, particularly in the UK, where a second store is due to open soon, following the "huge success" of its first store opening at the beginning of the year.

The group's fashion and leather goods business saw revenue increase 11% to £26.6 billion (€30.9 billion). However, the group has seen slowing demand for luxury goods in the US and Europe, where rising prices have led to shoppers pull back on spend, while recovery in China was uneven.

Looking ahead, in an uncertain economic and geopolitical environment, LVMH said it remains "confident" in the continuation of its growth.

The group will maintain a strategy focused on "continuously enhancing the desirability of its brands, drawing on the authenticity and quality of its products, excellence in distribution and agile organisation".

This slow down in growth also hit the shares of rival Kering and Richemont this morning.