LVMH misses Q3 forecasts as fashion, leather sales fall 5%

LVMH reported weaker-than-expected organic sales growth for the third quarter on Monday. Its fashion and leather goods division, which includes Louis Vuitton, posted a 5% organic decline as demand in China slowed. As the world's largest luxury group and the first major company in the sector to report third-quarter results, LVMH's update is likely to add to investor worries that the luxury industry, now in its third year of slowdown, will struggle to recover.reuters+2

Group revenue for the quarter came to €18.5 billion, an organic increase of 1%. Analysts surveyed by Visible Alpha had expected 1.3% growth. Analysts had also forecast a much smaller drop in fashion and leather goods: about 1.8% according to Visible Alpha and 1.57% according to Bloomberg. The division produces nearly half of the group's revenue.bloomberg+2

China weighs on Louis Vuitton

The company said its third-quarter results "reflected the impact on business activity of a less buoyant environment in China," while the United States, Europe and Japan "saw good growth". Bloomberg reported that Louis Vuitton was hurt by a boycott in China. LVMH's statement referred only to "the slowdown in demand in China" and did not mention a boycott.finance.yahoo+1

Fashion and leather goods revenue fell to €8.25 billion in the quarter, down from €8.50 billion a year earlier. The company said Jonathan Anderson's designs at Christian Dior had been a "major success," that Loro Piana had performed well, and that it sold Marc Jacobs to WHP Global on September 1.finance.yahoo

Other divisions grew

Selective retailing, which includes Sephora, grew 8% on an organic basis in the third quarter. Watches and jewelry, led by Tiffany & Co. and Bvlgari, and wines and spirits each grew 6%. Perfumes and cosmetics rose 1%.finance.yahoo

For the first nine months of the year, revenue was €57.1 billion, down 2% on a reported basis and up 2% organically. Organic growth has moved unevenly through the year: 1% in the first quarter, 3% in the second and 1% in the third.finance.yahoo

Outlook

LVMH did not give a numerical forecast. The company said that despite an environment that "remains uncertain," it "remains confident" and will draw on its brands to "reinforce its global leadership position in luxury goods once again in 2026".finance.yahoo