LVMH Moët Hennessy Louis Vuitton is pleased with what it called "quite solid" sales growth from July through September that exceeded the results from the first half of 2016. The French luxury conglomerate saw comparable sales in the most recent quarter increase by six percent, and in the first nine months of the year by five percent to €26.3 billion (about $29 billion).
The best performing category of the quarter was perfumes and cosmetics, which also lead the first nine months with eight percent sales growth. In a Tuesday call with investors, LVMH CFO Jean-Jacques Guiony called out the successful fragrance launches of Miss Dior Absolutely Blooming, Guerlain's La Petite Robe Noire and Kenzo World, as well as the continued growth of Dior's J'Adore and Sauvage. He also noted the launch of Louis Vuitton's new fragrance collection, which falls under the fashion and leather goods category that the brand dominates: In terms of sales, the fragrance "doesn't contribute much," but is highly valuable in terms of image of marketing. In addition, Sephora, which accounts for 40 percent of LVMH's US business, saw double digit revenue growth.
Meanwhile in fashion and leather goods, Guiony said that in addition to Louis Vuitton, Céline, Fendi, Kenzo and Loewe are also doing well. The company does not break out sales for individual brands, but something can be inferred from the labels that weren't mentioned in this category — including Dior and Givenchy. The most troubling brand is Donna Karan, the deacquisition of which was announced in July but will not be complete until the end of the year. The category as a whole saw sales grow by two percent in the first nine months of the year, which Guiony says would have been five points higher if not for Donna Karan.
Marc Jacobs also saw sales decline in the third quarter, as the new streamlined strategy continues to be implemented. "It's a slow process; we have to convince our customers that they should trust us again that we have a strong value proposition," said Guiony, adding that sales will likely continue to be down for the rest of the year.
Also notable: Sales in Asia saw the biggest jump in the last three months — 10 percent — thanks to increases everywhere in the region except Japan, where low tourism spend is still a problem and where sales decreased three percent in the year so far. Sales in Hong Kong increased in the mid-teen digits in the third quarter. In addition to Japan, France is another troubling region due to declining tourism but started to pick up again in September.