Bernard Arnault’s LVMH sees slow quarterly sales growth

His wealth has since declined – he is now No. 2 on the billionaire list – and is set to decline further as consumers curb luxury spending amid economic woes.

LVMH third quarter financial report, Published on Tuesday, reveals that shoppers are no longer obsessed with luxury goods – especially in the US and Europe. During the period, the group’s sales grew 9% to 19.9 billion euros ($21.1 billion), down from 17% growth in the previous quarter.

Jean-Jacques Guiony, chief financial officer of LVMH, said: “After three great and glorious years, growth is moving towards figures more in line with historical averages” tell analysts.

Revenue growth slowed in some of the group’s key divisions, including fashion and leather goods. Sales of wine and spirits also fell 10%, which LVMH said was a factor in “the normalization of post-pandemic demand and continued high inventory levels among retailers.” There were other factors that contributed to the lower earnings numbers, such as a stronger euro against the dollar.

COVID hangover

Slowing sales growth heralds the luxury industry’s correction after the COVID-19 pandemic prompted people to spend generously on mountains of high-end goods Lock in savings. LVMH has benefited from this, with its revenue growing significantly during the peak of the epidemic.

But signs that demand for luxury goods may be weakening are becoming increasingly clear, with an index tracking 10 European luxury goods stocks including LVMH and British fashion brand Burberry reporting its biggest quarterly decline since 2020 earlier this week. Arnold’s company also ceded its status as Europe’s most valuable company to Danish pharmaceutical giant Novo Nordisk in September.

LVMH is one of Europe’s largest companies by market capitalization and a leader in luxury goods and is considered a leader in the industry. LVMH’s performance could set the tone for other brands such as Hermès and Kering when they report later this month.

UBS analysts said LVMH’s results “confirmed the ongoing normalization of the sector, driven by macroeconomic weakness” but said the company’s shares were the best buy in the luxury sector amid economic pressures stocks held.

“We continue to believe that LVMH’s best-in-class brand portfolio, the industry’s solid long-term fundamentals, and its pricing power still make it one of the best stocks to own in the industry amid this uncertain backdrop,” Rui said. Silver analysts said in a note on Wednesday, wealth.

LVMH, for its part, is confident in its ability to bounce back and keep growing amid headwinds.

“The group is confident of continued growth amid an uncertain economic and geopolitical environment,” LVMH said in a statement on Tuesday.

The ebb and flow of Arnold’s wealth

The French billionaire currently has a personal fortune estimated at $169 billion. Bloomberg Billionaires Index. But as chairman and CEO of LVMH, his wealth is largely tied to his stakes in the luxury goods group, including a 97.5% stake in Christian Dior.

His fortune fluctuated with the rise and fall of the luxury goods industry. Investor concerns about a gloomy economic outlook and high inflation are reflected in the share prices of luxury goods stocks such as LVMH, which in turn has hurt Arnold’s wealth. In May, for example, the tycoon’s fortune plummeted by $11.2 billion in one day as his company’s stock price took a hit.

But each time the luxury goods company made progress, Arnold’s net worth increased, leading him to surpass Musk multiple times last year. According to statistics, the LVMH boss’s wealth more than doubled between 2020 and 2021, from US$76 billion to US$186.3 billion. arrive Forbesestimate.

The 74-year-old executive, one of whose five children already holds senior positions in the luxury goods empire, is poised to take over the mantle of Arnold, but he may stay on for some time.Last year, LVMH extended retirement age Its chairman and CEO increased from 75 to 80 years old.