The numbers for LVMH’s first quarter confirm the challenges of the fashion industry. From January to March, the largest conglomerate of the segment recorded a revenue of 20.7 billion euro: -2% compared to the same period of 2023 but 3% more in comparable value. The datapoint is aligned with the analysts’ forecasts, but the Fashion & Leather Goods division isn’t performing as well as it used to. China is on stand-by: revenue from Asia (Japan excluded) decreased 6% at constant rates. LVMH is thus also slowing, confirming the normalization of the luxury industry mentioned by Bernard Arnault. It’s a shared opinion.
LVMH slows
LVMH is the first group to reveal Q1’s financials, after Kering’s profit warning. According to Reuters, the slowdown is also caused by the price tags’ increments, as they have pushed aspirational consumers to save, rather than spend. The Fashion & Leather Goods division recorded a loss of revenue (to around 10.5 billion euro) of -2% and an organic growth of value of +2% at constant rates. This too, according to Reuters, is aligned with the analysts’’ expectations. During the presentation of the results, LVMH pointed out the positive performances of leather creations from Fendi, Loro Piana and Rimowa.
Innovation and investments
“Within an uncertain economic and geopolitical context – reads an official press release of the French group -, LVMH remains attentive and confident for this year. The group will continue to pursue its strategy, focused on developing its brands thanks to an approach driven by innovation and investments. Along with a strong search for product quality, their desirability and distribution”.
China is on stand-by
China no longer pulls the fashion cart. But even with the negative result, the group’s CFO, Jean-Jacques Guiony, said that LVMH “is fairly satisfied” with demand from Chinese customers. According to Guiony, the contraction of consumption must also consider the fact that Chinese consumers are once again travelling and spending their money abroad.
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