Lest we forget, the watch industry is dominated by less than a handful of conglomerates. One of which is LVMH. LVMH’s presence in the watch industry is a significant one. The conglomerate boasts a portfolio of renowned watch brands, such as TAG Heuer, Hublot, and Zenith. Each of these brands carries a distinct heritage and craftsmanship that contributes to LVMH’s stature in the horological world. So when it is time to report on the latest earnings, it is always worth a listen and try and connect the dots across the broader industry..
For LVMH, the third quarter of the year presented some challenges as it reported a slowdown in growth, not only across the board but particularly in its watches and jewelry sector. The revenue generated from this sector reflected a modest three percent increase compared to the same period in the previous year. This figure stands in stark contrast to the more robust growth figures witnessed in the earlier quarters of 2023, with Q1 experiencing an impressive 11 percent growth and Q2 even surpassing that with a remarkable 14 percent growth. The cumulative growth for the first nine months of the year stands at nine percent, highlighting a relative deceleration. In watchmaking, the limited highlights of the quarter included the opening of TAG Heuer’s flagship store in New York and Hublot’s appointment as the Official Timekeeper for the FIFA Women’s World Cup in Australia.
Looking at LVMH’s performance from a broader perspective, the conglomerate reported nine percent growth across all its sectors for Q3. This represents a notable dip when compared to the steady 17 percent growth recorded in both Q1 and Q2. Interestingly, the only sector that performed worse than watches and jewelry during the third quarter was the wine and spirits segment, which saw a seven percent decrease in revenue.
LVMH’s Q3 performance, while marked by a slowdown in growth, underscores the challenges faced in an uncertain economic and geopolitical environment. We will keep an eye out on the ‘others’ the coming weeks and months to see what is happening elsewhere.