1 week Ago By Nora Redmond
LVMH reported a 3% decline in sales in its most recent quarter. The drop is driven by decreased demand from Chinese consumers, affecting luxury sales. Investors were disappointed when Beijing failed to disclose new details about its stimulus plans.
Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Go to newsletter preferences Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy .
You can opt-out at any time by visiting our Preferences page or by clicking "unsubscribe" at the bottom of the email. Advertisement French luxury conglomerate LVMH , the world's largest luxury company, reported a 3% year-on-year decline in sales in its most recent quarter. Sales of wines and spirits were down 7%, while sales of its fashion and leather products group — a core part of the business that includes Louis Vuitton and Christian Dior — fell by 5% compared to the third quarter of 2023.
This represents this division's worst performance since the second quarter of 2020 when lockdowns were introduced worldwide at the beginning of the COVID-19 pandemic. On Wednesday, LVMH shares fell by nearly 7% in early trading, driven by waning demand from Chinese consumers, who were once key spenders of European luxury goods. Advertisement "Consumer confidence in mainland China today is back in line with the all-time low reached during Covid," LVMH's chief financial officer Jean-Jacques Guiony told analysts in its earnings call.
Last week, investors expected fresh details about the government's plans to stimulate China's faltering economy from the National Development and Reform Commission, the country's top economic planner. Instead, luxury brands hopeful to see a rise in demand amid economic recovery were left disappointed , with the absence of new details hitting the stocks of sectors most reliant on China — luxury and mining. LVMH's sales in the Asia region, excluding Japan, dropped 16% in its latest quarter after declining by 14% in the previous quarter.
Advertisement In Japan, revenue decreased from 57% last quarter to 20% in its most recent earnings — still resulting in a 36% jump overall in the first nine months of the year. Some Chinese luxury consumers have been flocking to Japan to take advantage of lower prices caused by the country's currency downturn. Revenue changes for LVMH have been slow in the United States and Europe, with no difference and a 2% increase this quarter, respectively.
.
