LVMH has reported better-than-expected growth for its fiscal third quarter, helped by improved conditions in China and the US.
For the three months to 30 September, revenue was up 6% to €9.14bn on a constant-currency basis, accelerating from the 4% growth in Q2 and the 3% rise in Q1.
Sales at its Wines & Spirits division rose by a modest 4% on an organic basis to €1.23bn, helped by increased demand for its Hennessy Cognac and Champagne. The Perfumes & Cosmetics division recorded a strong 10% rise to €1.24bn, with Christian Dior recording market share growth in all countries and the Givenchy and Guerlain brands also coming up strong. The Selective Retailing unit saw growth of 8% to €2.8bn, as Sephora gained market share in all countries and recorded double-digit growth. Finally, its core Fashion & Leather Goods division, meanwhile, saw sales grow by 5% to €3.1bn.
LVMH said sales in Europe remained good “with the exception of France which continues to feel the impact of a decline in the number of tourists”, while Asia showed a “significant improvement”, and the US remained “well positioned”. However, it noted that given the “uncertain geopolitical and currency environment”, it will stick to its strategy of “innovation and targeted geographic expansion in the most promising markets.”
- Where at: Good luxury-based growth in markets that are growing.
- Where headed: LVMH’s policy of targeted geographic expansion could provide opportunities for top-end brands with slightly different profiles.
- Effect on you: Competitor-NAMs might profit from detailed SKU-by-SKU assessment of differences vs the LVMH offering.
- Action: Take a lead from LVMH, identify your plus-points and focus on differences.