LVMH, whose luxurious merchandise span Moet & Chandon champagne and Bulgari timepieces, mentioned on Tuesday the recognition of its star labels Louis Vuitton and Dior helped its style and leather-based items division, which accounts for almost half of group gross sales, to report 24% development.
Revenues for this enterprise on the finish of the quarter had been 38% above their pre-pandemic, 2019 degree, the identical price as within the first half.
The luxurious items business has bounced again strongly from the well being disaster, even when worldwide journey, a key development driver in pre-pandemic instances, has not absolutely resumed.
LVMH chief monetary officer Jean-Jacques Guiony mentioned income development in Asia had been beneath strain in August attributable to anti-coronavirus restrictions being partially re-imposed in some nations however mentioned the group had not observed a change in client conduct in China.
A name by China’s President Xi Jinping in August for “widespread prosperity” and wealth redistribution had prompted buyers’ to fret that Beijing would possibly promote measures geared toward lowering the nation’s wealth hole, curbing high-end consumption on the earth’s largest luxurious market.
“We do not see any purpose that this might be detrimental to the higher center class that’s the bulk of our buyer base,” Guiony mentioned.
Luca Solca, analyst at Bernstein, was constructive on the robust income efficiency on the style and leather-based items enterprise.
“We consider this could comes as a aid to buyers, particularly after the August wobble within the sector and doubts on Chinese language demand developments and even when different divisions scale back their development versus 2019 within the third quarter.”
The corporate’s efficiency confirmed a marked enchancment in Europe within the third quarter, even with out deep-pocketed guests from Asia, as native journey resumed over the summer time.
LVMH recorded 28% income development in america, in contrast with a 60% rise within the first half of the yr, and 12% in Asia, excluding Japan, in contrast with 70% within the first six months of the yr.
Guiony mentioned the group had no provide chain points given its manufacturing is essentially based mostly in Europe and in addition disregarded issues about rising transport prices, noting that the group has adequate margins to manage.
Total Like-for-like gross sales, stripping out the impact of international trade fluctuations, rose by 20% to fifteen.51 billion euros ($17.90 billion) within the three months to September.
Progress was roughly in keeping with an analyst consensus forecast for a 21% rise.
Guiony mentioned the corporate would proceed to give attention to broadening the attraction of its blockbuster acquisition, U.S. jeweller Tiffany, by refocusing its product assortment and ongoing advertising and marketing efforts.
LVMH has been rebranding the jeweller with a watch to attracting youthful customers, projecting a marketing campaign starring Beyonce and Jay-Z on digital billboards in New York Metropolis’s Occasions Sq. and creating buzz on social media with Ok-pop star Rose.