LVMH Shows That China's Luxury Shoppers Aren't Finished Yet
(Bloomberg) -- LVMH confirmed that Chinese demand for high-end products like Louis Vuitton handbags and Dior makeup remains strong, extending the luxury industry’s boom.
The French company’s sales grew 10 percent on an organic basis in the third quarter, in line with analyst forecasts and previous periods despite a tough base for comparison.
- Skittish investors have sold shares in LVMH and competitors like Kering in recent weeks over China-related concerns including a volatile yuan, a trade war with the U.S. and speculation about a customs crackdown on undeclared imports.
- The report may provide some reassurance, but shareholders have gotten used to the French luxury giants beating forecasts. For the real news, investors may have to wait until a Wednesday call when analysts can press management for guidance on current Chinese spending.
- Recent acquisitions like Christian Dior Couture, consolidated in LVMH’s financials for the first time, are boosting growth, thanks to a hard-to-miss Instagram rollout for Dior’s saddlebag line.
- LVMH’s watches and jewelry division has kept pace with the larger fashion and leather goods arm, even as high-end Swiss timepieces struggle to recover from a slump. Last month the company named new management for its watchmaking brands.
- For more on LVMH’s numbers, click here.
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