High-end product giant LVMH is behind brands like Louis Vuitton (LVMH)
Thank you for reading this post, don't forget to subscribe!This morning, LVMH stocks dropped as investors reacted to the Paris-listed high-end product powerhouse reporting sluggish sales.
In an update released after markets closed yesterday, the company, which is responsible for the beverages business and multiple brands including fashion labels Louis Vuitton and Celine, stated that the third-quarter organic revenue growth was 9%, a decline from the previous three months’ 17%.
It also mentioned that group revenue for the first nine months of the year was €62.2 billion (£53.7 billion), an increase from €56.5 billion.
This morning, the company’s shares fell by 7.23%. The company observed growth in all business divisions excluding wine and spirits during the nine months, with Hennessy Cognac showing the reflection of the US economic environment.
The Chief Financial Officer, Jean-Jacques Guinoy, also noted the difficulty in comparing performance due to the post-pandemic boom and stated, “After three intensive and exceptional years, growth is moving towards numbers that align with historical averages.”
The company, which praised Louis Vuitton’s “remarkable” performance, asserted, “In an uncertain economic and geopolitical climate, the Group is confident in sustaining its growth and will maintain a strategy focused on continuously enhancing the appeal of its brands based on the authenticity and quality of its products, excellence in delivery, and an agile organization.”
Victoria Schaller, Head of Investments at Interactive Investor, expressed, “Although luxury has been a robust sector recently, LVMH’s results suggest that the golden age for luxury is beginning to conclude, given that customers with higher disposable incomes are relatively shielded from living costs pressures, making it the first in the sector to emerge.”
However, research indicates that there will be further growth in this field going forward. According to forecasts from market research company Euromonitor International, in the UK, the broader high-end product industry could reach a value of £59.1 billion by 2026.
It predicts that the retail value of the sector, which encompasses high-end automobiles, wine, personal items like designer clothing and shoes, and experiential luxury, will experience an expected growth of £48.9 billion this year.
Source: uk.finance.yahoo.com
