LVMH Group of France recently released its financial report for the third quarter of 2023. In the three months ending September 30th, sales revenue increased by 1% year-on-year to 19.96 billion euros, with an organic revenue growth rate of 9% excluding the impact of exchange rate fluctuations. In the first and second quarters of 2023, LVMH Group's revenue and organic revenue both increased by 17% year-on-year.

Due to underperformance compared to analyst expectations, LVMH Group's stock price immediately fell after the release of its third quarter financial report. Previously, LVMH Group had already given way to Danish pharmaceutical company Novo Nordisk in September after topping the list of the most valuable companies in Europe for two and a half consecutive years.

Several analysts have reported a downward trend in global demand for luxury goods.

Luca Solca, an analyst at consulting firm Bernstein, pointed out in a report that the end of the pandemic does not necessarily boost luxury consumption, but rather will lead the luxury goods industry back to normal operating cycles. Under the previous high base comparison, the sales growth of luxury goods groups may slow down.

The slowdown first appeared in the US market. The US market is showing a trend of retaliatory consumption in 2022, with multiple luxury brands recording triple digit growth at one point. But in the first half of 2023, LVMH Group and Kaiyun Group's US market revenue increased by 3% and decreased by 16%, respectively. Even for the relatively stable Herm è s Group, its revenue growth in the North American market has decreased from 34% in the first half of 2022 to 20.7% in the first half of 2023.

More specific data is that in the United States, luxury consumption through credit cards decreased by 16% year-on-year in July and August 2023 compared to 2022. Reducing credit card consumption shows that consumer attitudes have gradually returned from being radical to being conservative, and the retaliatory prepayment brought about by hedonic attitudes after the epidemic has begun to decrease.

Recently, Morgan Stanley and Bank of America have lowered their 2024 luxury goods industry earnings per share expectations by 6% and 7% respectively, with the latter stating that luxury goods consumption in the United States has shown a significant decline. Amidst the weakening trend of luxury consumption in the United States, the luxury goods industry hopes to make up for its losses through the Chinese market after a comprehensive social recovery, as well as the European market where tourism consumption is rising.

By region, LVMH Group's sales revenue in the United States, Europe, and Japan increased by 2%, 7%, and 30%, respectively. Excluding Japan, the Asia Pacific market saw an 11% increase in revenue. In the second quarter, the market's revenue growth was 34%. Jean Jacques Guiony stated that there has been no significant change in sales of LVMH Group's brands in the Chinese market over the past quarter, but described the narrowing of revenue growth in Europe as a "significant change".

Regarding China's performance, Jean Jacques Guiony further stated that the return of consumers overseas has had an impact to some extent. Since the beginning of 2023, approximately 30% of the sales contributed by Chinese consumers to LVMH Group come from overseas markets. And for the entire year of 2022, this number is 15%.