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LVMH Q3 Revenues Short of Estimates

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A feeble global economy put the squeeze on revenues for LVMH Moet Hennessy Louis Vuitton SA.

Third quarter revenues for the world’s largest luxury products maker fell short of analysts’ forecasts.

An across the board slump in sales growth for fashion and leather products was responsible for the disappointing bottom line for Paris-based LVMH.

Numbers released by LVMH tell the story:

Although revenues increased to 7.02 euros (US $9.5 billion), some 15 analysts had forecast a median increase to 7.24 billion euros, according to data acquired and reported by Bloomberg.

LVMH posted an eight percent increase in sales, separate from incidentals including acquisitions, disposals and foreign currency hedges and transactions.

An 8 percent spike in sales is a significant increase, but analysts had forecast a ten percent boost.

To makeup for its slow revenue growth at Vuitton, LVMH is acquiring equity positions in boutique fashion brands and pumping up some of its own smaller fashion brands. Vuitton products account for the majority fraction of LVMH sales and profitability.

Vuitton, however, is by no stretch a failing enterprise. Revenues for Vuitton over the last nine months rose a respectable four percent, although they were down from the five percent increase of the first half, and one percent short of the 6 percent median forecast.

Despite slow growth and a sputtering European economy, statements from LVMH reflect the firm’s optimism and confidence.

Looking to the future, a statement from LVMH said, “The group will continue its proactive strategy centered on innovation and targeted geographic expansion in the most promising markets.”

 

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