What: The modest increase in LVMH's revenues and the slowdown in luxury spending highlights changing consumer behaviours and economic conditions in key markets.

Why it is important: The results reflect a normalisation of growth rates in its fashion and leather goods division as inflation and high interest rates impact discretionary spending.

LVMH's quarterly revenues were below analysts' estimates, indicating a slowdown from the previous quarter; the 3-months to September 30th revenues were EUR 19.96 billion, which is below the Bloomberg estimate of EUR 21.15 billion. The fashion and leather goods division saw a 9%  increase in sales on a like-for-like basis, but this was lower than the growth recorded in the second quarter.

LVMH cited uncertain economic conditions in Western economies and challenges in China as contributing factors to the slowdown. Despite the moderation in growth, LVMH remains confident in the performance of brands like Dior and is focused on optimising store numbers and category mix. Demand softened in Europe and Asia, while the U.S. saw unchanged trends. In Asia, Chinese spending on fashion and leather goods outside of Asia doubled compared to the previous year.

LVMH plans to continue marketing initiatives and expects the second half of the year to be full of new initiatives although the company's chief financial officer, Jean-Jacque Guiony, stated that it is too early to determine whether the slowdown in luxury spending is temporary or long-term.

LVMH announces its Q3 results