Teresa Rivas
American depositary receipts of LVMH Moët Hennessy Louis Vuitton are sinking on Tuesday afternoon, after the luxury firm announced its latest results.
The company said revenue came in at EUR60.8 billion in the first nine months of 2024. That included slight growth in the U.S., while LVMH noted "strong growth in spending by Chinese customers in Europe and Japan." Japan itself posted double-digit-percentage revenue growth, remaining a strong outlier, as the weak yen has prompted bargain hunting shoppers to turn to that nation's stores.
Among its various businesses, LVMH's selective retailing, which includes the Sephora brand, led the pack, with 6% organic growth compared with the year-ago period, followed by its perfumes and cosmetics division, which notched 5% growth.
Its fashion and leather goods business was down 1% on an organic basis, with watches and jewelry falling 6% and wine and spirits down 8%. Together, that meant organic growth for the company as a whole was flat for the first nine months of 2024, or down 2% on a reported basis.
In terms of its outlook, LVMH said in its press release that despite the "uncertain economic and geopolitical environment, the Group remains confident and 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 organization."
LVMH ADRs were recently down 17% in Tuesday trading. The stock is off more than 19% since the start of the year.
Other luxury retailers are also feeling the pain, with ADRs of Hermès, Gucci owner Kering, Burberry, and Prada also lower, although not as dramatically, in recent trading.
China has been a major stumbling block for luxury companies recently: That nation has been central to the industry's growth but its weak economy has meant fewer willing buyers. The shares soared after the Chinese government's stimulus plans were announced in late September but it's too early to tell if that will be enough to move the needle.
However luxury companies have also made missteps in terms of merchandise and pricing that's also led to share declines.
Write to Teresa Rivas at teresa.rivas@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
October 15, 2024 14:09 ET (18:09 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments