With the luxury segment hard hit by the economic downturn it was no surprise that third quarter group sales slipped 0.6 per cent, from €4.16bn in the €4.14bn, although the figures beat market expectations, which Bloomberg News had forecast at €4.07bn.
The company said that the third quarter represented a distinct upward trend compared to the first two quarters, and hinted to restocking, after a continued period of de-stocking by distributors.
For the full nine months sales were slightly down from €11.95bn to €11.94b, which on an organic basis, taking into account currency translations, represented a fall of 6 per cent.
Fragrances drive sales
Breaking the figures down, the company’s perfumes and cosmetics division did relatively well, with sales showing particularly strong signs of picking up in the third quarter.
For the first nine months of the year sales were €1.97bn, a drop of 5 per cent compared to the same period last year, when sales came in at €2.08bn.
The financial world responded positively to the results, with share prices on the Paris Bourse closing yesterday up €2.45, to reach €74.90.
Champagne sales go flat
The performance of the cosmetics division compared well to others, such as wine & spirits and watches & jewelry, which were harder hit by the economic climate as sales fell by 14 per cent and 19 per cent respectively.
The only consumer goods division to show positive growth was fashion and leather goods, which saw sales grow by 7 per cent to €4.54bn, driven by big gains coming on the back of strong sales of leather bags in China.
LVMH said that sales of its J’Adore fragrance continued to bring significant dividends for its Christian Dior brand, alongside the launch of the new lipstick Serum De Rouge.
Ange ou Demon
Other fragrances that also scored well for the company included Guerlain’s Idylle, Givenchy’s Uma Thurman-backed Ange ou Demon, as well as the new launch of Benefit fragrance proving strong and the Make up For Ever line showing ‘very strong growth’.
LVMH CFO Jean-Jacques Guiony said in a conference call concerning the results that he was ‘beginning to see some light at the end of the tunnel’ and called the results from the market in China ‘exceptional’.
However, Guiony did also state that the ‘crisis is not over yet’, suggesting that the company will continue to struggle in many of its leading markets in both the US and Europe.