European luxury companies have reported mixed trends for the third quarter, amid a slowdown in sales growth across the industry. Weaker-than-expected results from LVMH Moet Hennessy Louis Vuitton, regarded as a bellwether for the industry, sparked concerns about luxury spending as a result of inflation and high interest rates. However, other names such as Hermes International and Brunello Cucinelli have bucked the trend and posted double-digit sales growth.


--Gucci owner Kering posted sales of 4.46 billion euros ($4.76 billion) for the third quarter, below analysts' forecast of EUR4.52 billion, according to FactSet. Gucci sales slipped 7% on a comparable scope and exchange-rate basis to EUR2.22 billion. Yves Saint Laurent recorded a 12% sales contraction to EUR768 million, while Bottega Veneta sales fell 7% to EUR381 million. Sales in Kering's other houses, including Balenciaga and Alexander McQueen, dropped 15% to EUR805 million.


--Sales at French luxury-goods seller Hermes rose in the third quarter, driven by a strong performance across all its business lines and geographical areas. Sales came in at EUR3.365 billion in the July-September period compared with EUR3.14 billion in the same period last year. Hermes's revenue slowdown was less pronounced than at peers, reflecting supply and demand imbalances, a higher share of loyal and higher-end demographics, lower exposure to tourist demand and pricing, Citi analysts Lorenzo Bracco and Thomas Chavet said in a research note.


--French luxury-goods giant LVMH posted higher sales for the third quarter, but missed analysts' expectations. The company reported sales of EUR19.96 billion in the three months to the end of September, up 9% on an organic basis from the previous year. However, expectations for this year were far too high given the strong growth trends seen in the past few years, and LVMH's performance in the third quarter wasn't bad overall, said Jean-Philippe Bertschy, managing director and head of Swiss equity research at Vontobel.


--Salvatore Ferragamo reported a decline in sales for the first nine months of the year, with revenue of EUR844 million, down 8.3% at current exchange rates from the year-earlier period. Europe was the only market in which the Italian luxury-goods maker reported growth, at 3.1%, while North America and the Asia Pacific posted declines of 20% and 16%, respectively. Ferragamo seems to have suffered more than peers from macroeconomic headwinds, particularly in Europe and Asia, Citi analysts said in a research note.


--Italian fashion firm Brunello Cucinelli raised its guidance for revenue growth for 2023 after it posted sales of EUR818.4 million for the first nine months, growing 27.5% at current exchange rates. The company's double-digit growth across all its markets defied expectations for many luxury peers, Deutsche Bank Research analyst Matt Garland wrote in a note to clients.


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(END) Dow Jones Newswires

10-24-23 1256ET