12 hours ago | By WGSN Insider
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Oct 15, 2014
French luxury goods giant LVMH posted modest Q3 and nine-month sales late Tuesday as stronger performances in Europe and the US helped offset weakness in Asia. Star performers were its fashion and selective retail divisions. As with Burberry earlier in the day, LVMH also pointed to an “uncertain economic and financial environment” and failed to offer a full-year fiscal earnings target. Quarterly organic growth rates by division were also missing. The group is expected to offer further details about its performance in a conference call later Wednesday.
For now, overall sales rose 5.2% year-on-year to €7.39bn ($9.37bn) in Q3. Comparable sales grew 4% in the three months to September 30, in line with analysts’ expectations, and topping the 3% in Q2 but dipped below the 6% gain recorded in Q1.
For the nine-month period, the group recorded a 4% overall sales increase to €21.4bn.
All units, except the wines & spirits division, posted growth for the quarter, despite slowing demand in some markets.
Comp sales for the group’s fashion & leather goods division grew 9% in Q3 and by 3% in the nine months to September 30 to €7.677bn, following a 4% hike in H1. Currency neutral sales in the division rose 8% for the nine months.
By brand, Louis Vuitton continued its “strong momentum” in innovation and creative development, driven by chief designer Nicolas Ghesquière, it said.
“True to the maison’s spirit of innovation, collaboration and boldness, the launch of the new Monogram collection, as interpreted by six famous designers, will be one of the highlights of the fourth quarter”, it predicted.
It also noted both Fendi and Céline brands “made good progress” and continued to expand their leather goods and footwear collections while developing their store networks. Other brands, such as Givenchy, Berluti and Kenzo, continued to “strengthen their positions”, it added.
Comparable watch & jewellery sales rose 5% in Q3 and by 2% in the nine months to €1.97bn, helped by strong trading at Bulgari. Currency neutral sales for the latter period rose 5%.
“Watches continued to be impacted by the cautious purchasing behaviour of multi-brand retailers in an uncertain economic environment”, it noted.
The launch of the new women’s watch Lvcea by Bulgari and the success of Hublot’s iconic lines were the key highlights of the quarter, it added.
In the perfumes & Cosmetics division nine-month sales rose 4% (up 8% currency neutral) to €2.8bn, “outperforming the market”, LVMH said.
Highlight sales came from Parfums Christian Dior’s J’Adore and Dior Addict while the make-up segment also contributed to the good performance of the brand, it said. Guerlain was boosted by the launch of its new men’s fragrance L’Homme Idéal, and the growing success of its premium skincare range Abeille Royale. Fresh, Benefit and Make Up For Ever also enjoyed “excellent performances”.
Selective retailing, which includes beauty retail chain Sephora and DFS duty-free stores, recorded 5% growth in the nine months (up 8% currency neutral) to €6.616bn, down from 9% in H1.
The group said the duty free division benefited from sustained airport activity but that “certain tourist destinations suffered the repercussions of financial or geopolitical changes”. Comparable store revenue growth was “particularly strong” in the US and the Middle East, it noted.
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