Luxury goods giant LVMH’s shares fall on slower sales growth update

Shares in LVMH fell this morning after investors reacted to the Paris-listed luxury goods powerhouse recording slower sales.

The company which is behind a raft of brands including drinks businesses and fashion labels Louis Vuitton and Celine, said in a update after the market closed yesterday that organic revenue growth in the third quarter was 9%, down from 17% in the prior three months.

It added that group revenue for the first nine months of the year was € 62.2 billion (£53.7 billion), up from € 56.5 billion.

Shares in the firm lost 7.23% this morning. The firm recorded growth in all business divisions during the nine months, excluding wine and spirits, with Hennessy cognac impacted in the US by the economic environment.

Finance chief Jean-Jacques Guinoy also pointed to the performance having a tough comparison when looking at the post-pandemic boom. He said: “Growth is converging — after three roaring and outstanding years — towards numbers that are more in line with the historical average.”

The company, which praised a “excellent” performance by Louis Vuitton, said: “In an uncertain economic and geopolitical environment, the group is confident in the continuation of its growth and will maintain a strategy focused on continuously enhancing the desirability of its brands, drawing on the authenticity and quality of its products, excellence in distribution and agile organization.”

Victoria Scholar, head of investment at Interactive Investor said: “While luxury has been a strong sector lately, given that customers with high disposable incomes are relatively sheltered from cost-of-living pressures, results from LVMH, the first in the sector, appears to suggest that the blockbuster period for luxury is starting to fade.”

However, research suggests there is more sector growth ahead. In the UK, the wider luxury goods industry here could be worth £59.1 billion by 2026, according to forecasts by market research company Euromonitor International.

It estimated the retail value of the sector, which includes high end cars, alcohol, personal goods such as designer clothing and footwear, and experiential luxury, will climb from an expected £48.9 billion here this year.