LV's parent company reports third-quarter revenue below expectations

Recently, the global luxury giant LVMH Group (LVMUY.US) released its third-quarter financial report for 2024, showing third-quarter revenue of 19.08 billion euros, down 3% year-over-year, falling short of analyst expectations of 20.05 billion euros. From January to September of this year, LVMH's revenue was 60.8 billion euros, unchanged from the previous year. Some analysts commented that LVMH's third-quarter sales "fell short across the board."

Breaking down the business segments, LVMH's fashion and leather goods (including high-end brands like Louis Vuitton and Dior) generated revenue of 9.15 billion euros, down 5% year-over-year, below analyst forecasts of 9.67 billion euros, marking the first decline in revenue for this business since the COVID-19. Organic sales in wine and spirits declined by 7%, compared to analyst expectations of a 2.41% drop. The perfume and cosmetics department saw an organic revenue growth of 5%. In terms of regional performance, organic revenue in the Asian market (excluding Japan) declined by 16%, compared to analyst expectations of a 13.8% drop. The U.S. market saw flat organic revenue, below analyst expectations of a 3% increase. Although organic revenue in the Japanese market grew by 20%, it significantly lagged the 57% growth in the previous quarter.

Fashion and leather goods account for nearly half of LVMH's revenue and nearly three-quarters of its recurring profits. During the earnings call, LVMH's Chief Financial Officer Jean-Jacques Guiony stated, "The fashion division saw slight improvements in sales in European and American markets but performed poorly in China and Japan." Guiony believes that currently, LVMH is facing economic challenges in most markets, including Chinese mainland.