PARIS -- LVMH Moët Hennessy Louis Vuitton SA, the world's largest luxury-goods group, said third-quarter sales rose 3.1%, in the first indication of how spending on high-end trinkets tapered off over the summer.[LVMH] Getty Images
A model on the runway during the Louis Vuitton show earlier this month, as part of Paris Fashion Week.
The group, home to fashion house Louis Vuitton and Veuve Clicquot champagne, sought to reassure investors by confirming its full-year target of a "tangible increase" in net profit. Sales between July and September totaled €4.16 billion ($5.69 billion), up from €4.03 billion last year.
Until recently, the luxury-goods industry seemed remarkably resilient amid the financial crisis. Wealthy clients in emerging markets propped up weakening demand in mature markets such as the U.S., Japan and Europe. Yet faltering stock markets in Russia and China, coupled with a slowdown in tourism during the Olympic Games in August, have led to concerns that the party is over. LVMH's sales decelerated from 5% in the first half to 3.1% in the third quarter.
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At LVMH, the Olympic Games put a brake on spending in Asia, a region that accounts for 21% of group sales, excluding Japan. Many Chinese stayed home during the two-week event, putting pressure on LVMH's duty-free chain, DFS. For the group, August represented the weakest month of the quarter.
The slowdown was felt across LVMH's divisions. LVMH's star Louis Vuitton brand recorded sales growth on an organic basis -- excluding currency effects -- slightly below 10% in the third quarter, compared with growth of more than 10% in the first half. Italian fashion house Fendi saw sales increase above 10%. The wines and spirits division has clocked strong growth in Russia and China but the company said it is a "contrasting situation" in the rest of the world. The recent acquisition of watch brand Hublot boosted the watches and jewelry branch, which has been affected by a more difficult selling in the U.S.
LVMH's third-quarter sales do not include yacht maker Royal van Lent, which it agreed to buy last month, since the acquisition hasn't closed.
