Louis Vuitton can't sell?

laolin8个月前Celebrity Red Carpet164

**Title: Decline in Revenue Growth in the Third Quarter**


In the realm of timeless elegance and unparalleled luxury, the luxury goods giant Louis Vuitton (LVMH), boasting 75 renowned brands such as LV, Dior, Tiffany, Hennessy, and Bulgari, appears to be facing a challenging market.


On the evening of October 10th, Beijing time, LVMH, the global leader in luxury goods, released its third-quarter report for 2023. Despite achieving a revenue of €62.205 billion (approximately ¥481.6 billion) for the first three quarters, reflecting a 10.2% YoY growth compared to the previous year's €56.485 billion, the success is largely attributed to its performance in the first half of the year.


Examining the third quarter alone, LVMH recorded revenue of €19.96 billion, with a mere 1% YoY growth. This figure fell significantly below analysts' expectations of €21.14 billion, marking the first time in the year that revenue has fallen short of projections. Even considering factors such as exchange rates, the organic growth rate for the third quarter was only 9%, notably lower than the 17% in the preceding two quarters and the 19% recorded in the same period last year.


**Business Segment Performance in the First Three Quarters of 2023 (LVMH):**


- Fashion and Leather Goods: Revenue of €30.912 billion, a 16% YoY organic growth, a decrease of one-third from the 24% recorded in the same period last year.

- Watches and Jewelry: a 13% decline in YoY growth.

- Perfumes and Cosmetics: a modest 1% decline in YoY growth.

- Wines and Spirits: Revenue decline, with a cumulative 7% decrease in YoY growth, attributed to weak demand in the U.S. market and high retail inventory levels.

- Retail (including Sephora): Organic growth exceeded analysts' expectations.


From a regional perspective, Asia, predominantly China, LVMH's highest contributing market, experienced a decline in revenue growth from 23% in the first half of the year to 11% in the third quarter. Europe also showed a significant drop, from 22% in the first half to 7% in the third quarter, while the U.S. witnessed a slight reduction compared to the same period last year.


It is noteworthy that the contribution of the Asia-Pacific market to LVMH's revenue declined from 36% in 2021 to the current 32%, although it still maintains its position as the top-performing region.


With LVMH being the first luxury goods giant to release third-quarter results, concerns arise about the forthcoming reports from Kering (owner of Gucci and Balenciaga) and Hermès.


**Challenges in the Luxury Goods Market:**


As for the global luxury goods market, challenges are anticipated, particularly in key markets such as China and the United States. Recent reports from Morgan Stanley and Bank of America lowering profit expectations for the luxury goods industry in 2024, coupled with a decline in global private wealth, suggest a less optimistic outlook.


Changing consumer habits and attitudes, especially among the younger generation (Z Generation), are also contributing to the market's challenges. Increased national pride and shifting values indicate that younger consumers may not rely on luxury goods to the same extent as before.


Moreover, the luxury goods sector, faced with criticism for frequent price increases, may find resistance among younger consumers. According to a study on Z Generation luxury consumption trends in 2023, 36% of respondents expressed that price hikes would significantly impact their purchasing decisions, while 26% indicated a sense of aversion.


In response to these challenges, LVMH has initiated collaborations and marketing efforts targeting younger consumers, as seen in partnerships with brands like Fendi and Heytea. LVMH's CEO, Bernard Arnault, even visited various cities in China, seemingly aiming to capture the attention of the youthful Chinese consumer base.


While it remains uncertain whether this signals a broader downturn in the luxury goods market or is specific to LVMH's performance, a comprehensive assessment will only be possible after the financial reports from Kering and Hermès are unveiled.


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