LVMH Posts Surprise Return to Growth as China Sales Rise

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00:00LVMH has unexpectedly returned to growth in the third quarter.

00:04For more, let's bring in Bloomberg's Angelina Khascouy, joining us from Paris with the details.

00:08Angelina, what then has fueled the growth at LVMH this quarter? Is it likely to be sustained?

00:15Hi there, Tom. Indeed, what was interesting is that all the divisions beat, including the key fashion and leather goods one.

00:22I mean, that one was still negative, but what was interesting, as explained by the CF of LVMH,

00:27was that it was driven by, it's improving thanks to more traffic and volume, so not a price effect.

00:35Importantly, the struggling wines and spirits division, which had been in a downturn for two and a half years,

00:42is growing again, helped by champagne restocking in the U.S., solid rosé wine demand,

00:48even though cognac is still suffering.

00:50Geographically, Europe is down. It's the only region that worsens.

00:54That's because there's a lower tourism spend with a weak dollar against a stronger euro.

01:01However, China returned, you know, the region that includes China returned to growth.

01:06What we're seeing is that people in mainland China are growing again.

01:10Offshore Hong Kong back out, still down, but it's improving.

01:13So, overall, positive, you know, positive news.

01:19When it comes to creative renewals, we had quite a few changes in designers.

01:23We will see the impact of that in the first half of next year.

01:27That's what the CFO said.

01:28So, overall, pretty good.

01:31Yeah, and as you say, the turnaround in China, if that's sustained, could be really significant,

01:35and potentially significant for the broader luxury sector as well.

01:38What are the signals for the broader sector from these LVMH numbers?

01:43I mean, absolutely.

01:45What we saw yesterday is that competitors, you know, Zanyan, the U.S., was rising.

01:51Today, right now in Hong Kong, Prada is gaining.

01:54So, it's probably going to lift the whole market this morning in Europe.

01:59Next week, we're going to have more results.

02:02But Caring is in turnaround.

02:03They have a new CEO.

02:04They have a new CEO at Gucci as well, a new designer.

02:06We're going to get results from Hermès, and Richemont will be in November.

02:13So, but it's encouraging.

02:15For sure, it's encouraging, and I think that's what the market is telling us.

02:20Thank you very much for joining us.