LVMH Third-Quarter Sales Miss Estimates as Fashion and Leather Division Shrinks

3-line summary

• LVMH's organic sales rose 1% year-over-year to €18.5 billion in the third quarter, below the 1.3% growth analysts had expected, according to Reuters.
• The fashion and leather goods division, nearly half of group revenue, saw organic sales fall 5%, far worse than the 1.8% decline expected, with weaker demand for Louis Vuitton and Dior cited as the cause. LVMH said activity in China was "less buoyant" than before, even as the US, Europe and Japan posted "good growth."
• A crackdown on wealthy Chinese consumers' tax affairs was flagged as a new headwind for the luxury sector; Louis Vuitton also faced backlash in China over a copyright dispute with milk-tea chain Molly Tea. European luxury groups have lost roughly €330 billion in combined market value this year, with LVMH accounting for about 40% of that drop.

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