LVMH beats expectations and approaches 20 billion euros in turnover in Q3 2022. Luxury proves stronger than inflation. Because the big spenders keep on shopping: “Nobody,” Luca Solca of Bernstein explains, “wants to be the richest person in the graveyard”. LVMH’s key division, fashion and leather goods, also had a stronger-than-expected third quarter. Improved business in China and American shopping in Europe rewarded the French group. So far, no new price increases on the horizon.
LVMH approaches 20 billion
LVMH’s third-quarter revenues rose 19% on a comparable basis to 19.8 billion euros. Bloomberg’s estimate stood at 18.8 billion euros. The fashion and leather goods division grew 22%, better than the consensus forecast of 16.2%. In particular, Dior had an “excellent performance” of its leather goods and ready-to-wear, along with the “continued success” of models such as the Lady Dior handbag.
There are two markets under observation: the US and China. Growth in the US market is slowing down. In the third quarter of 2022 it was +11% year-on-year, while in the period April-June 2022 it was 22% over the same period in 2021. “A good deal of business is taking place in Europe,” commented LVMH Chief Financial Officer Jean-Jacques Guiony. “Americans tend to take advantage of the strong dollar”. Guinoy himself specified that one cannot speak of a recovery in China, but of improved conditions compared to the previous quarter. But “they are not back to normal”. WWD reports.
Prices were also discussed with the analysts. Guiony first stated how the luxury industry has the advantage of being able to pass on cost increases to customers. LVMH is facing “a certain level of cost pressure”, but “nothing unpleasant”. Finally, he said that a price increase in Europe to benefit from the influx of US consumers was not on the table for now.