LVMH’s Q3 results show ‘marked improvement’
The wine and spirits division of luxury goods giant LVMH showed encouraging signs of recovery in Q3 following a “significant drop” in the second quarter.
LVMH said there had been “significant improvement” in the trends recorded by its wine and spirits division in its third quarter results, posted last week.
While the group’s total revenue declined by 21% to €30.3 billion in the first nine months of 2020, it only declined by 7% in the third quarter.
Its wine and spirits division was among its top performers, declining by just 3% from July to September 2020. Following a “significant drop” in volume during the second quarter of 2020, LVMH said its Champagne business saw an improvement in all markets in Q3, with “gradual recovery since June”. Volumes are down by 23% for 2020.
Its wine division saw “improving performance” in Europe in Q3, however the US and Japanese markets still proved “challenging”.
Its Hennessy Cognac business returned to growth, driven by the performance of the VS expressions “in the context of exceptional stimulus support for consumer demand in the United States”.
This year, the company has also integrated its newly acquired Provence rosé producers Château d’Esclans and Château du Galoupet, and in Q3 launched a new high-end run brand called Eminente. It also unveiled 100% recyclable packaging for its Champagne house Ruinart, and unveiled the collaboration between Veuve Clicquot and Japanese artist Yayoi Kusama.
The results mean the revenue of its wine and spirits division is down by 15% in the first nine months of year to €3.35bn.
In a statement, LVMH said: “In a very turbulent context, marked by continuing economic and health uncertainties, LVMH will continue to exercise caution, strengthen its cost controls and selectivity in its investments. The group will maintain a strategy focused on preserving the value of its brands, by continuing its marketing and communication investments and relying on the exceptional quality of its products and the reactivity of its organisation.
“LVMH will rely on the power of its brands and the talent of its teams to further extend its global leadership in the luxury market in 2020.”