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LVMH Reports Slowest Sales Growth Since 2009 as Demand Wanes

Oct. 15 (Bloomberg) -- LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, reported the slowest quarterly sales growth since the last three months of 2009 as demand for leather goods and watches slowed.

Organic revenue, which excludes currency swings and acquisitions, climbed 6 percent in the third quarter, the Paris-based company said today after the market close. That missed the 7 percent average estimate of 10 analysts surveyed by Bloomberg.

“This set of results is not the greatest we have seen at LVMH,” Leopold Authie, a Paris-based analyst at Oddo & Cie., said by e-mail. “Many investors were very worried about a potential faster deceleration given the current context, notably in Asia-Pacific.”

Luxury-goods makers have reported divergent sales patterns since the end of August. Burberry Group Plc said demand is slowing, particularly at lower price points, while Prada SpA and Hermes International SCA said they’ve yet to be affected by the weakening world economy. Sales of expensive handbags and other items may advance 5 percent in 2012, excluding currency swings, less than half last year’s pace, Bain & Co. estimated today.

A deceleration in revenue growth at LVMH’s fashion and leather goods and watches and jewelry units is “worrying,” said Thomas Mesmin, an analyst at CA Cheuvreux in Paris. Fashion and leather goods sales growth slowed to 4 percent in the quarter, while watches and jewelry gained 2 percent, excluding currency swings and acquisitions, Mesmin estimates.

Confident Outlook

Total revenue in the quarter rose 15 percent to 6.9 billion euros ($8.9 billion), LVMH said. The median of six analysts’ estimates compiled by Bloomberg was 6.88 billion euros.

“The U.S. market continued to demonstrate solid momentum,” the company said in the statement. “In spite of a mixed business environment, Europe and Asia also contributed to the third quarter performance.”

LVMH said it “remains confident in its outlook for 2012.”

Nine-month sales rose 22 percent on a reported basis and 10 percent excluding currency swings and acquisitions, LVMH said.

The shares advanced 0.8 percent to 123.8 euros in Paris trading today, extending this year’s gain to 13 percent.

To contact the reporter on this story: Andrew Roberts in Paris at

To contact the editor responsible for this story: Celeste Perri at

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