PARIS: LVMH Moët Hennessy Louis Vuitton SE said Monday its third-quarter revenue rose 16% as the French luxury goods company benefited from a weak euro, and strong sales at its wine and spirits division outweighed slowing growth at its fashion business.
LVMH posted revenue of €8.58 billion ($9.75 billion), led by what it called a “notable acceleration” in its liquor business, which includes Moët Champagne and Hennessy cognac. That division posted a 26% increase to €1.2 billion in the three-month period ending September.
LVMH said Hennessy cognac volumes increased 12% in the third quarter due to a “strong rebound” in demand in China and “continued excellent momentum” in the U.S.
The company’s overall organic revenue growth, which strips out the effects of currency, came in at 7%. Organic growth at the wine and spirits division was 16%. LVMH doesn’t publish quarterly profit figures.
The large gap between organic and overall growth highlights how the low euro has boosted Europe’s luxury industry. The currency means overseas sales translate to even more when converted back to euros, while currency volatility drives Chinese shoppers to Western Europe and Japan as prices for handbags and other items are significantly higher in their home countries owing to taxes and exchange rates. Other luxury firms, including Hermès International SCA and Gucci owner Kering SA, have been reported similar phenomena throughout this year.
However, the company’s fashion and luxury goods division, which includes the flagship Louis Vuitton brand, showed just 3% organic growth to €2.94 billion, a decline from 5% over the first half of the year. Still, the company said “Louis Vuitton continued its growth,” noting “great success” with its monogram line, a turnaround from two years ago when the logo-driven products fell out of favor with fashion-conscious consumers.
The company will hold a conference call on Tuesday afternoon to discuss the results.
