LVMH sales soar in Q3 despite China trade tensions
Luxury goods outfit shows resilience
French multinational luxury goods conglomerate LVMH reported revenue growth in the third quarter of 2019 despite the consequences of global trade war.
The company that owns multiple luxury brands including Louis Vuitton, Hennessy, Dior, and others, claimed its revenue grew 11% in comparison to the same period last year and reached €13.3 billion (£12 billion, $14.6 billion).
The numbers are way more higher than the forecasts made by experts, who predicted 8.8 per cent growth and €12.7 billion in revenue.
As for the first nine months of 2019, the group recorded a 16 per cent increase in revenue, reaching €38.4 billion as a total.
The conglomerate revealed that sales in Europe and the US made good progress during Q3. In the meantime, the Asian market also performed well despite the recent tensions and protests in Hong Kong.
LVMH is the first major luxury conglomerate to unveil its Q3 2019 results, with Hermès and others to follow soon. As FT reports, the group’s performance has been resilient so far despite the ongoing trade war between the U.S. and China.
The conglomerate is heavily dependent on Chinese economic situation, as Asia ex-Japan is one of the biggest markets for LVMH responsible for a third of the group’s sales.
LVMH’s shares were up 4 per cent following the report, trading at €371.45 at the time of publication.
The company said Europe and the US markets performed well in the three months to the end of September, as did Asia despite the political protests in Hong Kong.
Forecasts for the luxury giant’s growth were weakened as LVMH boutiques in Hong Kong became a backdrop for protests that went from the city’s streets to its airport and shopping malls.
About 6% of the company’s sales were registered in Hong Kong dollars during the first half of the year, according to an interim financial report.
Hong Kong’s retail sales plunged by value to a record 23% in August from a year earlier as demand for luxury goods such as jewellery and watches descended.
People in Mainland China have been doing more of their shopping close to home as Beijing cut import duties, bringing down local prices.
The ongoing protests in Hong Kong are expected to speed up that trend with analysts anticipating that most luxury brands will make up only around half of their lost Hong Kong sales elsewhere.