LVMH fashion and leather sales growth slows in Q3

Luxury goods industry leader LVMH posted a mixed set of third-quarter revenue figures on Monday that revealed a strong rebound in cognac sales, particularly in China, but a slowdown at its key fashion and leather business.

The division, LVMH's biggest profit and revenue contributor with brands such as Louis Vuitton and Celine, saw underlying revenue growth slow to 3 percent from 10 percent the previous quarter.

LVMH's Moet Hennessy spirits division, which suffered from a slump in China amid efforts to ban gifts such as cognac bottles given in return for favours, said trading there had improved and demand from the United States remained strong.

In the three months to Aug. 31, the unit's comparable sales jumped 16 percent, marking its best quarter in many years.

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LVMH said Hennessy cognac, whose volumes increased 12 percent, "benefited in the third quarter from a strong rebound in shipments to China and continued excellent momentum in the United States".

LVMH, which also sells Bulgari jewels, Tag Heuer watches and Dior perfume, generated overall third-quarter, like-for-like revenue growth of 7 percent, a figure slightly higher than some analysts expected.

"This is a good set of numbers overall," Luca Solca, a luxury goods analyst at Exane BNP Paribas said.

"Yet, we anticipate the miss in fashion and leather goods may be taken as a negative by the market - re-opening questions on Louis Vuitton, just at a time when a recovery by the leather mega-brand was becoming consensual."

The group is expected to give more details of its performance on a conference call at 1300 GMT on Tuesday.