LVMH’s Q3 2023 results demonstrated that the trends that were apparent during 1H 2023 continued into the back half of the year. For the U.S. business, cognac continues to be hammered (sales down more than 20%) as return-to-office doesn’t favor afternoon cocktails. Fashion & Leather Goods (Louis Vuitton and Dior) continue to be impacted by a pullback by the aspirational luxury consumer and the absence of the prestige luxury consumer that’s still traveling in Europe. Sephora continues to crush it with sales up around +30%. Also reflective of the strong Sephora trend, LVMH’s Perfumes & Cosmetics group (Dior, Guerlain, Givenchy, etc.) was also solid. Below, we share recent traffic results for Sephora--something we discussed recently when analyzing Sephora at Kohl’s, which has been one of the key drivers of Sephora’s exceptional growth.
Of note, the “consistent” trends to 1H 2023 in Fashion & Leather Goods suggests that one should expect consistent trends to the 1H for the U.S. brands and department stores, be it Michael Kors, Kate Spade, Coach, Macy’s, Nordstrom, (i.e., sales will decrease during Q3 2023) and “unfortunate,” which is how LVMH characterized the trend in the US. Below, we show Nordstrom and Coach as emblematic of that “consistent and unfortunate” trend.
