LVMH under pressure in Paris; third-quarter revenue receives a lukewarm reception

(Il Sole 24 Ore Radiocor) - LVMH is trading lower on the Paris Stock Exchange following the publication of its revenue figures for the first nine months of 2026, which showed that organic growth remained positive but that there was a slowdown in the third quarter, mainly due to the less dynamic market conditions in China.

More specifically, the French luxury giant reported turnover of 57.1 billion euros in the first nine months of the year, down 2 per cent at current exchange rates and up 2 per cent on an organic basis. “Thanks to the diversification of its activities, LVMH has remained resilient in an uncertain geopolitical and economic climate, whilst maintaining its innovative momentum,” the group emphasised. In the July–September period, however, organic revenue growth was affected by the less dynamic environment in China, whilst the United States, Europe and Japan recorded solid growth. The Fashion and Leather Goods division, which includes the flagship brands Louis Vuitton and Dior, recorded revenue of €26.39 billion, down 4 per cent at current exchange rates and 2 per cent on an organic basis.

Analysts at Bernstein and Jefferies believe that the slowdown in the division is more pronounced than expected and primarily reflects the difficulties in the Chinese market, as well as specific factors that have affected one of its flagship brands, Louis Vuitton. The brand had to contend with the ‘Molly Tea’ affair at the start of the third quarter, relating to a dispute over the logo of the Chinese tea group, which was deemed similar to the French fashion house’s monogram, and with criticism from the Chinese public, despite LVMH’s victory in court. Dior, on the other hand, is benefiting from the positive results of the new collections designed by Jonathan Anderson, whilst the menswear collections by Pharrell Williams, creative director of the menswear line since 2023, have not yet had the impact the market had anticipated.

Bernstein also highlights a temporary logistical issue that hampered Louis Vuitton in the third quarter, with an estimated impact of between 0.5 per cent and 1 per cent on the Fashion and Leather Goods division. According to the investment bank, the brand’s revival will take time, and the first lasting effects of the corrective measures may only become apparent within two or three quarters.

Jefferies also highlights the Fashion and Leather Goods division’s performance, which fell short of expectations, whilst other areas of the group posted better results. Analysts highlight in particular the resilience of Wines and Spirits and the strong performance of Sephora, which have helped to offset, at least in part, the difficulties faced by the core business. However, the debate over the nature of the slowdown in China and whether Louis Vuitton’s difficulties are temporary or reflect more structural issues regarding the brand’s positioning and appeal remains open. The picture emerging from the analyses therefore remains one of caution: the group’s recovery will depend on its ability to revitalise the Fashion and Leather Goods division and to consolidate demand in China.