LVMH’s largest and most closely watched division, Fashion and Leather Goods, posted a 5% organic revenue decline in the third quarter, missing analyst expectations and underscoring how much the luxury conglomerate’s flagship brand, Louis Vuitton, is still grappling with softening demand in China. The group as a whole managed modest 1% organic growth for the quarter, with nine-month revenue reaching €57.1 billion.
The division continued to find support in the US market, where demand held up, but that resilience wasn’t enough to offset a mid-single-digit decline across Asia, where Chinese sales fell in the mid-teens percentage range compared with a year earlier.
Louis Vuitton’s quarter was further complicated by a logistics and transportation disruption that shaved more than a percentage point off the division’s growth. The brand has also faced a reported trademark dispute in China, compounding a broader slowdown in Chinese luxury spending that has weighed on the sector for much of the past two years.
Despite the setback, LVMH said core Louis Vuitton products such as the Alma and Speedy lines continued to show solid demand, while the brand is working to build traction for newer additions including the Multipass and Squire bags, part of a push to diversify beyond its flagship franchises as it works to stabilize the China business.
The quarter illustrates a now-familiar divide across the luxury sector, with US resilience offsetting a Chinese market that has yet to fully recover, weighed down by a slower domestic economy and increasingly selective, value-conscious shoppers. LVMH's results are closely watched as a bellwether for the industry given the scale of its fashion and leather goods business.
Investors will be watching whether the logistics disruption behind part of this quarter's shortfall proves temporary, and whether LVMH's push into newer bag lines can offset continued softness in its largest growth market heading into the holiday season.
