LVMH(LVMUY) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a 14% organic revenue growth for the first nine months of 2023, with a 10% increase on a reported basis after a negative 4% currency impact [6][31] - The revenue for the Wines & Spirits division decreased by 7% on an organic basis and 10% on a reported basis [11] - Fashion & Leather Goods revenue increased by 16% on an organic basis, while Perfumes & Cosmetics grew by 12% [14][19] - Selective Retailing saw a significant 26% increase in organic revenue growth [27] Business Line Data and Key Metrics Changes - Fashion & Leather Goods was a strong growth driver, up 16% organically year-to-date, with notable performances from Louis Vuitton and Christian Dior [4][14] - Wines & Spirits saw a 2% organic growth in Champagne and Wines, but a 14% decline in Cognac and Spirits due to weak U.S. demand [4][12] - Perfumes & Cosmetics maintained a 12% organic growth, with strong contributions from brands like Christian Dior [19][20] - Watches & Jewelry increased by 9% organically, with jewelry showing double-digit growth [5][24] Market Data and Key Metrics Changes - Revenue growth in Asia was 32%, while Europe (excluding France) grew by 16% [7] - The U.S. accounted for 24% of revenue, down 2 percentage points from the previous year [7] - Quarterly growth in Asia moderated from 23% in the first half to 11% in Q3, reflecting a challenging comparison basis [8] Company Strategy and Development Direction - The company aims to strengthen its global leadership and market share while remaining flexible in the face of macroeconomic uncertainties [31] - There is a focus on creating innovative, high-quality products and making selective investments in strategic store network expansion [31] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the recovery of the Chinese market, indicating that forecasting consumer behavior remains challenging [44][84] - The company noted that the impact of currency fluctuations on sales is significant and will be factored into future projections [46][68] Other Important Information - The company reported a high level of inventories in Cognac, which are slowly decreasing, indicating a cautious approach to market loading [62] - The performance of the European consumer market showed a slight decline in Q3 compared to previous quarters, attributed to various economic factors [82] Q&A Session All Questions and Answers Question: Performance by nationalities and brands in Fashion & Leather Goods - Management reported that the Chinese clientele showed consistent growth, while European nationalities experienced a decline in Q3 [36][37] Question: Performance of medium-sized brands like Celine and Fendi - Management acknowledged that some medium-sized brands have lost momentum, but did not provide specific details [38] Question: Cost base management and budgeting - Management indicated that discussions around cost management are ongoing, particularly in light of currency impacts [46] Question: Chinese demand recovery and economic headwinds - Management expressed satisfaction with the Chinese market performance but acknowledged challenges in recovery speed [50][84] Question: Pricing impact on future growth - Management confirmed that pricing will have a limited impact on growth in the upcoming year [66] Question: Performance of Watches & Jewelry - Jewelry outperformed watches in Q3, with Bulgari performing better than Tiffany due to geographic mix advantages [71]