US consumers cut down their spending on high-end goods such as leather and jewellery in the first three months of 2023, luxury group LVMH Moët Hennessy Louis Vuitton’s latest financial results show.
LVMH, whose portfolio of brands includes Tiffany & Co, Christian Dior, Fendi, Stella McCartney, and Sephora, delivered a 17% jump in revenue in 1Q results driven by strong performance in the Asian and European markets.
CMC Markets UK chief market analyst Michael Hewson noted that the luxury group’s rise in 1Q sales was more than double what the market had expected.
“Japan saw the biggest growth, a rise of 34%, while Chinese shoppers also splashed out as the economy there reopened after a year of on-off lockdowns,” he said. “Sales growth in that region saw a rebound of 14% which is expected to augur in similar resilience over the rest of the year.”
European sales grew 24%, but US revenue growth was comparatively muted at 8%. LVMH’s finance chief Jean-Jacques Guiony attributed the company’s US revenue growth to the strong performance of its more accessible Sephora beauty chain.
"For the rest, the business is slowing down a bit," he said as reported by Reuters, citing softer demand for fashion, leather goods, and jewellery.
“Maybe interest rate rises are taking their toll on spending," Guiony said in the Reuters report.
In the wines and spirits business group, which grew by a record 3% during the first quarter, LVMH noted its Hennessy cognac volumes were down due to the softer US economic environment and high inventory levels.
LVMH’s Euoprean-listed shares were up 5.7% at €884.50 while its US-listed shares had added 3.1% at US$195.88 shortly before noon Eastern Time on Thursday.
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