The "difficult" retail environment that Burberry noted in its half year earnings report Tuesday morning clearly resonates with other luxury companies. Later the same day, LVMH also cited an "uncertain economic and financial environment" as a challenge, with its wines and spirits business taking a hit over the first nine months of 2014 thanks to destocking by distributors in China.
Across its various brands, revenue for the French luxury giant grew 4 percent in the third quarter of this year to roughly $9.4 billion, consistent with its growth in the prior two quarters. While fashion and leather goods have seen a modest 3 percent rise over the course of the last nine months, perfumes and cosmetics came out much stronger, up by 8 percent. J'Adore Dior is a bright spot among its fragrances, and Fresh, Makeup Forever and Benefit continue to do well.
Interestingly, LVMH's watches and jewelry business also recorded 5 percent growth, going against Bain & Company research released Tuesday suggesting that the category is decelerating relative to accessories. Of course, watch sales did falter, consistent with Bain's findings, but a particularly good quarter at Bvlgari drove jewelry sales forward.
In its report, LVMH was typically non-specific about its fashion brands' sales, although the group maintains that they're all doing well. Louis Vuitton, for its part, is continuing what its parent company calls a "strong momentum in innovation" since Nicolas Ghesquière's appointment.