LVMH fashion sales rise 1% in Q2

“For the time, we still see a lot of Chinese travellers in Japan, which basically says something about the appetite of mainlanders for our brands: it shows no sign of fading away,” LVMH CFO Jean-Jacques Guiony told analysts on Tuesday. “This situation of Japan attracting most of the growth is creating a bit of deflationary pressure in China itself because if you can’t buy at Japanese prices, you don’t buy and wait until you go to Japan. It’s quite complicated to anticipate what will happen in the second half. We have no reason to be pessimistic, but being optimistic would be quite bold at this point in time.”

By category, perfumes and cosmetics grew 4 per cent, watches and jewellery decreased 4 per cent, and selective retailing, which includes cosmetics retailer Sephora, grew 5 per cent. The wines and spirits division fell 5 per cent for the quarter.

Luxury as a whole is facing a slowdown. Richemont also reported sales up 1 per cent in the quarter ending 30 June. Burberry reported that retail sales tumbled 20 per cent year-on-year at constant exchange rates in the Q1 2024, while Hugo Boss reported sales down 1 per cent at constant exchange in the second quarter. Kering, Moncler, Hermès and Prada are to report their numbers in the coming days.

Bernstein managing director Luca Solca says about LVMH’s overall performance: “All in all, this shouldn’t be an insurmountable problem, given the minimal size of the miss and the significant pullback the LVMH share price has suffered since the initial post-fourth-quarter 2023 reporting euphoria.”

“While remaining vigilant in the current context, the group approaches the second half of the year with confidence, and will count on the agility and talent of its teams to further strengthen its global leadership position in luxury goods in 2024,” Arnault said.

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