LVMH said total group revenues for the recently ended third-quarter reached € 10.4 bn, as Chinese demand for LVMH’s luxury fashion and spirits helped third-quarter sales to rise more than expected.
The world’s biggest luxury group said revenues grew 12 percent year-on-year in the last quarter, to € 10.4 bn, excluding currencies and acquisitions. The growth surpassed analyst estimates of € 10.2 bn.
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All LVMH divisions experienced double-digit growth with the exception of wines and spirits, which saw an increase in revenues of 4 per cent, due to supply constraints.
Organic growth was led by perfume and cosmetics, which increased 17 percent, while the watches and jewellery, and selective retailing divisions each saw revenues leap 14 percent year-on-year. Moreover, fashion and leather goods increased 13 percent.
For the first nine months of the year 2017, LVMH revenues lifted 12 percent to €30.1bn, the group said in a press release.
The Paris-based group operates a slew of luxury brands including Louis Vuitton and Fendi, and champagne maker Moet & Chandon, among many others.
CEO Jean-Jacques Guiony said his firm is still dealing with the beginnings of the return of Asian tourism, set back by a strong euro.
Looking ahead, Guiony commented on the end of the year, flagging a tough comparison for the fourth quarter (October to December 2017), when LVMH earnings will compare to 2016’s recovery in Chinese spending.
“The real tough comparison base starts in September and in the fourth quarter,” said Guiony. “We still feel the challenges identified at beginning of year are still there.”
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The double-digit growth for the French luxury group comes at a time when the industry fends-off rapid changes in consumer tastes, fluctuating tourism and hot-and-cold demand from shoppers in key regions such as Asia.
“The continued strong growth in the third quarter despite tougher comparisons signals a positive demand environment amongst luxury consumers that is encouraging for the broader luxury sector,” Goldman Sachs analysts wrote in a note.