A few days after providing financial support to the Institut Pasteur for Covid-19 research, luxury group LVMH is sharing its latest quarterly results. Despite a sales decline of -7% in Q3, the company is limiting the damage and experiencing a “significant improvement” compared to the first half of 2020. LVMH has recorded a decrease of -21% for the first nine months of the year, amounting to 30.3 billion euros, compared to the previous year.
The recovery, which was observed as early as June, is confirmed in all of LVMH’s business territories, with Asia leading the way. Two segments, in particular, are doing well. The Fashion & Leather Goods sector, which declined -11% since the beginning of the year, is showing a resurgence with a growth of +12% in the last quarter alone. This growth is driven by the success of brands like Louis Vuitton and Christian Dior. The Wines & Spirits category, which had declined -15% since the beginning of the year and -3% in Q3 alone, is also showing signs of strength. Champagne sales have seen a significant recovery, and cognac sales have been boosted by increased consumption in the United States.
Although the situation remains sensitive for segments such as Perfumes & Cosmetics (-25% since the beginning of the year) or Watches & Jewelry (-30%), LVMH plans to strengthen its cost control and be selective with its investments in the coming months. The company also aims to maintain its investments in communication and marketing as part of its strategy focused on preserving the value of its brands. This raises the question of whether brand content could be a weapon of resilience for LVMH.
Useful links:
1. LVMH Financial Press Releases
2. COVID-19 Could Turn Back Luxury Brands by Decades
