Ladies and gentlemen, good afternoon, and welcome to today's conference call. I'm Rodolphe Ozun, Director of Financial Communications, and with me is Cécile Cabanis, our Chief Financial Officer. Cécile will start by taking you through the key highlights of the first nine months of 2026. I will then comment on performance by business group. After that, Cécile will conclude, and then we'll be happy to take your questions. Before I begin, I refer you to the safe harbor statement included in our press release and on slide two of our presentation, which is available on the LVMH website, lvmh.com. Let's now move on to today's topic, our nine month figures, and passing over to Cécile.
Thank you, Rodolphe. Good afternoon, and thank you all for joining today. I will start with slide three with a few comments on the third quarter. As you've seen in the press release, LVMH showed good resilience over the first nine months of the year and recorded, again, positive organic growth in the third quarter. Currency impact on revenue turned positive in Q3 after five consecutive negative quarters. The quarter was marked by a more macro-led challenging consumer backdrop among Chinese clientele, which resulted in a mid-single-digit decline in Asia for the quarter, with a more tangible impact on fashion and leather goods, the division most exposed to the region. As far as the other divisions are concerned, the strongest performance came from wine and spirits, watches and jewelry, and selective distribution, all up mid to high single digit, while perfume and cosmetics grew in line with the group average.
At group level, Europe, the U.S., and Japan all grew mid-single digit in the third quarter, more than offsetting the decline in Asia. Moving to slide four, where you see the revenue bridge for the first nine months of 2026. Group revenue reached EUR 57.1 billion, up 2% organic, down 2% on a reported basis. The reported figure includes a - 3% currency impact and a - 1% perimeter impact from the disposal of additional DFS assets and the sale of Marc Jacobs closed on September 1st. As shown on chart five, the geographic revenue mix remained entirely stable versus the same period last year. So again, a very balanced geographical footprint, with U.S. representing 25%, Asia 27%, and Europe 26%. Moving to slide six, you can see that all regions are positive year-to-date but with fast-evolving quarterly patterns.
In the third quarter, specifically, Asia was penalized by a sharp macro-led deterioration in Chinese consumer sentiment, with tangible impact on discretionary expenses, which explain the mid-single-digit decline that you see. Europe, on the other end, accelerated markedly, driven by improving trends across all division. Finally, the U.S. and Japan, up 5% and 6% respectively, were slightly above year-to-date average, with fairly consistent trends in the U.S., more uneven in Japan, but mostly due to very uneven comparison basis. Rodolphe will now take you through division performance in more detail. Rodolphe.
Thank you. Thank you, Cécile. As usual, we will start with wines and spirits. Slide nine shows the wines and spirits business group delivered EUR 4 billion in revenue for the first nine months of 2026. This represents a 5% increase on an organic basis and a 3% increase on a reported basis after taking into account a - 2% currency effect. Broken down, champagne and wines generated EUR 2.2 billion in revenue over the nine month period, up 6% organic and up 3% reported. Cognac and spirit recorded EUR 1.8 billion in revenue, up 4% organic and up 2% reported over the nine month period. On Slide 10, which details some of the key highlights of the business group, the positive trends seen over the course of the first half continued and even accelerated modestly, resulting in 6% organic growth in Q3 for wines and spirits as a whole.
In the third quarter, our key champagne brands all contributed to growth, driven by solid demand in Europe, Japan and travel retail, and by the continued outperformance of Dom Pérignon and Krug, which resulted in a positive mix impact. Year-to-date, our champagne business also benefits from low single-digit volume growth and low single-digit price impact. Other wines enjoyed a strong summer season in Europe, supporting tangible volume growth in the third quarter. Chandon enjoyed strong U.S. demand and a good response to its new Garden Spritz collection. In cognac, Hennessy's performance continued to improve in Q3, driven by China, travel retail, and Europe, as well as good momentum in the VSOP quality. In the U.S., we are pleased by the launch of the new Hennessy Ready to Serve.
Still early days, of course, but it appeals to both existing and new customers and creates a positive halo effect on the brand. Lastly, in spirits, Belvedere and Glenmorangie continued to grow in the third quarter. Now turning to fashion and leather goods on slide 12. Revenue reached EUR 26.4 billion for the first nine months of the year. This represents a 2% decrease on an organic basis and a 4% decrease on a reported basis after taking into account a negative 2% currency impact. Now on slide 13, as per Cécile's introduction, the quarter was marked by a more challenging consumer backdrop in Asia, whilst U.S. demand continued to grow and Europe and Japan improved compared to the first half of the year.
On Louis Vuitton, specifically, the brand continued to capitalize on the strengths of the Monogram through iconic products such as the Speedy and its high-end incarnation, the P9, which continues to enjoy increasingly strong demand with waiting lists across markets, as well as more recent product launches such as the Squire and the Multipass. Also worth highlighting is the strong performance of ready-to-wear year-to-date and the rising success of animations such as the Back to School collection. Finally, the quarter saw the opening of a new store in Changchun in China, which is off to a good start. Recent flagship reopenings are also delivering strong results. Christian Dior delivered positive organic growth in the first nine months of the year, driven by the success of Jonathan Anderson's collection, especially women bags and ready-to-wear.
The Maison's icon, the Lady Dior, is performing well, while the Toujours bag continues to gain excellent traction. A new House of Dior renovated by Peter Marino also opened in Milan mid-September. Finally, Loewe, Loro Piana, and Rimowa continue to enjoy above-average momentum. Elsewhere, the creative renewal of our brands is yielding encouraging results, exemplified by the success of the Soft Triomphe at Celine, the new Baguette at Fendi, women ready-to-wear collections at Givenchy, or the new Amazona 180 at Loewe, to give a few examples. Moving to perfumes and cosmetics on slide 15, revenue reached EUR 5.9 billion for the first nine months. This is flat on an organic basis and down 2% on a reported basis after taking into account a - 2% currency impact. Turning to slide 16, which lists some of the product innovation by our Maison.
To summarize the quarter, I would say, once again, our historic Maison, notably Parfums Christian Dior and Guerlain, continued to outperform. Fragrances remained strong and the main driver of growth year-to-date, also including a good performance from Parfums Loewe and Maison Francis Kurkdjian. By region, Asia and Japan enjoyed good momentum and the Middle East remained resilient. The division also saw the appointment of a Chief Operating Officer to help drive stronger convergence between Maisons across manufacturing, supply chain, and purchasing functions. On watches and jewelry, I am on slide 18. Revenue rose to EUR 7.7 billion in the first nine months, up 8% on an organic basis and up 4% on a reported basis after taking into account a negative 4% currency impact. Turning to slide 19, jewelry recorded an excellent performance year-to-date, supported by growth across geographies, and our Maisons made good progress on strategic priorities.
Tiffany's iconic lines, for instance, HardWear and Knot, continued to outperform materially alongside Sixteen Stone and Bird on a Rock, which are resonating with a broad clientele. Tiffany also progressed in its store renovation plan with now 40% of stores renovated also outperforming significantly. In high jewelry, the Hidden Garden collection has been well-received and contributed to the continued growth of the high jewelry segment. Bvlgari enjoyed another quarter of strong momentum, thanks to the growing success of iconic lines Serpenti, Diva, and B.zero1, and good success in watches, notably Serpenti and Octo, which are adding further to its momentum. The Maison also unveiled its Ovos art installation on the New York High Line as a part of New York Fashion Week, it is Bvlgari's first installation in the United States, which has consistently been a fast-growing market for the Maison over the past few years.
Additionally, our watch Maison continued to showcase their expertise with several unique new launches, and Hublot notably welcomed artist Jeff Koons as collaborator and global brand ambassador. To discuss our last business group, Selective Retailing on slide 21. Revenue in the first nine months came to EUR 12.5 billion, a 6% increase on an organic basis and a 1% decline on a reported basis after taking into account a minus 3% currency impact and a minus 4% perimeter impact due to DFS disposals. Moving to slide 22, Sephora continues to excite worldwide with growth across all regions, notably its two largest markets, the U.S. and Europe, where Sephora continues to expand into new geographies and new countries. Its unique selling proposition of a fun shopping experience, exclusive brands, exciting stores, continues to resonate. For example, with the brand Rhode, which just launched with Sephora in Europe.
Sephora more recently announced the launch of TikTok in the U.S. and Marks & Spencer, a partnership in the U.K. to help expand its reach with customers and complement existing footprint. Le Bon Marché enjoyed another quarter of growth, supported by a rich array of artistic and cultural events, the latest bringing the best of Japan to Paris. Meanwhile, the group continued with the sale of DFS assets, including the latest announcement in August of the sale of DFS Abu Dhabi travel retail to Falic Group, all of which resulted in a 7% perimeter impact on the division in Q3.
Thank you, Rodolphe. As a conclusion, maybe a few words. As presented, the third quarter brought a more challenging Chinese consumer backdrop with a feel-good factor deteriorating at the very beginning of the quarter, and this added to a Middle East situation that is still a headwind. We hope these situations will subside, but in the meantime, self-help is a priority for performance to improve. On that front, we are seeing progress across our brands. Louis Vuitton keeps gaining traction on recently launched product across its price pyramid. We can go back on that later. Dior is now outperforming across geographies, double digit with the American clientele year-to-date. Celine is improving fast and building real momentum in the U.S. Obviously, we will continue and accelerate self-help initiatives in the coming months while building on the strong momentum of Loro Piana and Rimowa.
At the same time, it is worth noting that Watches & Jewelry and Sephora kept delivering very solid growth. Wine and spirit posted mid-single-digit growth for a third straight quarter, proof that the team's effort are paying off. While the environment got tougher, the group continues to grow in the third quarter, supported by its geographical balance and diverse portfolio. Finally, share buyback continued and amounts to EUR 2.3 billion for the first nine months of 2026. Thank you for your attention. We are now ready for your question.
Thank you. This is the conference operator. Welcome. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. The first question is from Chiara Battistini, JP Morgan.
Good morning. Good evening. Thank you for taking my questions. The first question on the performance in fashion and leather goods. I was wondering if you could give some more color by brand, possibly, especially the two bigger ones. As you mentioned, Cécile, that we would go back to the product pipeline and the pyramid of LV. If you could give us any updates on the strategic actions you're taking on the product and innovation for LV specifically. The second question on watches and jewelry and the slowdown that you also recorded there in Q3. I was wondering if also there, you could give us a bit more color in terms of the drivers of that slowdown, possibly by region and any brand in particular that you would call out driving that slowdown.
The third question, if I may, on the margins implications as we are tracking on a negative number in Q3. If top line remains negative also in Q4, so for H2, how should we be thinking about the margins implications? I know it's early and a sales call, but I'll try my luck. Thank you.
Thank you, Chiara. On the first question regarding the performance by brands in fashion and leather goods, the first thing to consider is that the slowdown came from subdued Chinese demand, so this is broad base. Obviously, as always, you have outperformance. In the Q3, it's the case of Christian Dior. It's the case of Loro Piana and Rimowa, for example. Louis Vuitton is not very far from the average, as usual. It's a bit below this quarter. Louis Vuitton was also impacted by a one-off logistic and transportation disruption from one of our freight forwarder, which costed a bit more than a point of growth for the quarter. It was unfortunate it's behind us, but it didn't help for the performance on the quarter. So that would be for your questions regarding the different brands.
Regarding pipeline and innovation for LV, I obviously won't unveil all the products that are today in the pipe. What we can already say is that self-helps are delivering, and we continue to work, making sure that we strike the right balance between elevation and recruitment. What we see in the mix of initiatives that started and that will continue is a robust growth on evergreen products like the Alma and the Speedy, for example. A good response on recently launched bags such as the Multipass and the Squire. Good response as well on new designs and materials such as the Monogram Emblème or the Silktech, which is this new material, getting quite a good success. Women ready-to-wear has been positive year-to-date, and the Back to School animation, as Rodolphe mentioned, was quite positively received. So overall, we are seeing that the initiatives are bearing fruit.
On the high-end part, on the elevation part, we still have P9 that is doing very well. As you know, it is on waiting list. Rodolphe mentioned that as well. We have Jewelry doing well. On the other side of the spectrum, perfume continue to do well. Indeed, to counter the macro short-term pressure, it is absolutely necessary that bottom-up execution and self-help are there. What we have started to do is delivering. We need more, and more will come. On Watches & Jewelry slowdown, the first explanation is the same as for everyone, by the way, it is for the industry and even beyond. It is the slowdown macro led from Chinese demand and the fact that the consumers were less inclined to spend on discretionary goods. This is one of the explanation.
We had also, even if it is still growing very nicely, some slowdown in the U.S. between Q2 and Q3. There was a bit of a tougher basis of comparison for Tiffany, for example. Overall, on Watches & Jewelry, we still have a very good growth. We still have icons that are continuing to be over-performing, especially at Tiffany. You remember that Q3, we had a very nice dynamic around the icon like HardWear, Knot, but also joining them for this quarter, the Sixteen Stone and Bird on a Rock, which are performing well. We are still having some legacy business that is weighing on the performance, but overall, it is doing well and we are very confident. Then on Bvlgari, there is really a broad-based performance. We are very happy with that.
Bvlgari is really basing his all strategy on his high-end positioning, but able to launch a new line that are more accessible and enables also recruitment and volume. It has been a great journey for Bvlgari. On margin implication, which is your third question, the first technical item, which is something we mention in H1, is that FX will remain a headwind around 70 bps similar to H1. This will not change much. Cost discipline and efficiency, of course, remain a clear priority. But for the short term, cutting costs will not bring additional sales. We can probably fully offset the short-term top-line pressure, but we are keeping, and pushing on every level we can for improvement.
The next question is from Charles-Louis Scotti, Kepler Cheuvreux.
Yes, good evening, and thank you for taking my questions. I have three. The first one, would you be able to comment on the exit rate for fashion and leather goods? As you mentioned that there have been a deterioration of the Chinese consumer backdrop at the very beginning of the quarter, has it been the case also at the end of the quarter and during the Mid-Autumn Festival and the Golden Week? Do you think the October 22nd deadline for the payment of taxes on offshore trust in China and potentially the U.S. midterm elections could have an impact on the demand, also in Q4? My second question is on this one-off logistic issue at Louis Vuitton. Just to make clear, you mentioned that it has had an impact of 1 percentage point.
Were you referring to the Louis Vuitton organic sales growth or the overall fashion and leather goods division? Finally, on Jewelry, I would be interested in understanding the contribution from pricing, which I suspect close to around 10%. Are you planning to implement further price increase in October? If not, should we expect growth to slow down further as you start lapping the significant price increases implemented in October last year? Thank you.
Thank you, Charles-Louis. Maybe a response to your technical question. I was mentioning the impact of the logistic disruption that we had in Q3 is for Louis Vuitton, so it's a bit more than 1 point on Louis Vuitton organic growth. So that's for your clarification question. On the exit rate and is it improving? Overall, what we've seen is the exit rate did improve across the quarter. The brand initiatives are also paying off, but we need to continue to accelerate. We can hope for the context to subside, but the best way to answer it is really about bottom-up execution and self-help initiatives that needs to continue to come. So that's for what we've seen in the quarter. Your question on tax impact, I don't really like to comment macro. Your view is as good as mine.
What we can say is that the news flow has not been particularly good in China in the summer. So this has really waited on the feel-good factor and created a short-term subdued Chinese backdrop. Again, we hope it will subside. We are not sure when, and we make sure that we work on what we control, which are really self-help initiatives that are gradual, but that are already paying off. As we've seen, for example, Dior is outperforming in many markets, with the newness working very well, but also the work on the mix that has been done in the bags portfolio. So there are many good things. We need more while the context is a bit under pressure. On the pricing on Watches & Jewelry, there was some price impact, which is not new. It was also subsequent to the increase of gold prices.
What we can say now is that probably price increasing should moderate because the prices of gold is stabilizing. We shouldn't see as much as price impact in the future as we've seen in the recent year to overcome the gold prices. In Q4, you need to have in mind that the basis of comparison will be a bit tougher for Bvlgari, which was performing very well in Q4 last year. Next question.
The next question is from Antoine Belge at BNP Paribas.
Yes. Hello, good evening. It's Antoine at BNP. Three questions, if I may. You already gave a bit of flavor on the slowdown on fashion and leather, but out of the 6 points of deceleration, if all is attributed to the Chinese cluster, and I think the Chinese cluster was flat the previous quarter, would it be down around 20% or are there maybe some kind of a slowdown maybe in U.S. or elsewhere? On my second question about China, you mentioned the macro and the news flow. You didn't allude to the Molini controversy, and especially if the exit rate is a bit better, maybe it's that the impact of that is progressively disappearing. Would you agree on that? You're talking about quite a lot of self-help. I thought Q3 last year was quite full of self-help, notably with the boat in Shanghai.
Did that created a bit of a tough base also for you? If you could maybe comment a bit more about what you're doing in terms of clientele. Finally, on Dior. Dior, you said is outperforming, is it in positive territory, so at least 5 points higher than the division? In a way, do you consider that you're on track or isn't it a bit disappointing not to see stronger growth now that there are more products from the new designer in store? Thank you.
Thank you, Antoine. Maybe the best way to answer your first question is to give you a bit of details around clienteles. As you hinted, the macro news flow that led to a rapid shift in our consumer Chinese backdrop translated in Chinese demand down mid-teens. American clientele, by contrast, held up well, up mid-single digit. Europeans were up modestly. Japanese and Middle Eastern were down mid-single digit. If your figures don't fully reconcile, it's because the -5% is a small -5%, it's much closer to -4.5%. That would be for the year-on-year. If we look at the dynamic, the deceleration is obviously largely driven by the Chinese clientele. Americans, while still growing, also contributed a bit to the slowdown. It's also where the one-off in term of logistic for Vuitton impacted the most.
Otherwise, the clientele is up in a very healthy way and growing nicely. All the other clienteles overall between Q2 and Q3 remained unchanged, so no big move there. On your question on Molini, very difficult to size a precise impact, but the net it's probably fair to say that it had a negative impact, at least at the beginning of the quarter. On your mention regarding Q3 last year, the self-help and The Louis, and is it now putting a heavier comparison basis? I think it's very interesting to come back on The Louis, because it's one store, so you make the count and you look at how big it can be in term of comparison basis. But what is very interesting is that one year later, it's still full. So the bookings are always, we kept the bookings, it's always full.
You have a huge traffic there. For the brand, it continues to create a halo in term of image that is much beyond the traffic. But it shows that when traffic is subdued, if you are able to create real experience, you can get the customers to come to you. So, this is good because after one year, it's still going very well. Dior positive. Yes, Dior is positive year-to-date. It's, as I said, double digit year-to-date with the American clientele, which is very good. On the quarter it's flat, but it's also linked to the Chinese backdrop, which as I said, it's creating impact across brand, but Dior is outperforming in this situation and with the Chinese as well. We are not at all disappointing, to say the truth.
If we look qualitatively at what is happening, newness is getting good results in all category. We are seeing great traction on women ready-to-wear, which is the clearest read on consumer appetite for Jonathan Anderson designs. Bags are of different nature. They are more permanent products, so it takes a bit more time, but we are seeing successes across diverse design and price point. Either some tweaking into already existing iconic lines, or some new lines, or some adding mixes that are working very well, like the Dior Toujours Hobo or like the Cigale on the higher end. This is ultimately how you build icons along the road, rather than simply doing more of the same, which might create a short-term higher impact, but might not create enduring momentum.
And we believe that Jonathan has a very clear vision on Dior and where he wants to take the brand, and he has been building very nicely and consistently quarter after quarter, season after season, as far as he is concerned, adding new pages with great results. So no, we are not disappointing.
Next question.
The next question is from Erwan Rambourg, Goldman Sachs.
Yeah. Hi. I hope you can hear me. Erwan Rambourg, Goldman Sachs. So, maybe a follow-up on Vuitton. Is it the case that following Molini, maybe you stopped investing a bit in that market? And would it be the case that you are now in a position to maybe restart that? Then maybe a naive question on the one-off on logistics. Whatever you missed out on shipping in Q3, do you make up for part of that in Q4? Secondly, looking at the creative renewal, is there a way to think about the Jonathan Anderson product at Dior and potentially a ramp-up in terms of, I do not know how you express it, percentage of his products within the brand, or potential for this to go higher?
Then maybe if you can mention between Celine, Fendi, Givenchy or others, what you're seeing in terms of creative renewal and what the timeline might be. Then maybe lastly, on Sephora, if you could talk about maybe comparing, contrasting like for like versus space expansion for the U.S. on one side and Europe on the other. Thank you so much.
Thank you, Erwan. You're talking very fast. So on the first question regarding Vuitton and Molini, no, we are not stopping investing because there was the Molini topic. I think, let's maybe park Molini and really focus on the current macro pressure because the truth, and it's broad based, is that there was a shift in Chinese consumer backdrop, and this forces us to sharpen our self-help effort. On that point, we're fully aligned and we're working. That's why also I listed some of the initiatives to say that it's what we need to do, and we need to be very careful not to be too tactical when we do that. But what we do is working. We need to do more, but we have not stopped investing in China.
On logistic, on the one-off, well, it's always very difficult to say whether we're going to catch up the sales or not. We hope we will. Then we'll see in the next weeks. But that was definitely an additional factor in Q3 that is now behind us that didn't help Vuitton in the performance. On Dior, again, we've been happy with the performance. What we are seeing is a lot of appetite on the ready-to-wear for women. Men is less advanced, so we need to do a bit more work. On bags, there is really a good dynamic on tweaking the icons, but also starting preparing to have more icon in the future. So it takes a bit of time, but it yield short-term benefits. I was mentioning the Hobo. So we are very confident with Dior.
Again, as we discussed in H1, we are aiming to build enduring and long-lasting momentum and not being too tactical. So it's season after season that you can build, and that it's gradually increasing in your mix with all the new design and initiatives. Sephora, like for like versus reported. So first, let me take this opportunity to say a few words on Sephora, which had, as Rodolphe said, a very good performance again this quarter. It's really broad based on markets, it broad based on category, and it's really about continuing to gain leadership in key markets. Like for like is today overall half of the reported figures, if you want to take it. So it's still very strong and nice.
Next question.
The next question is from Thomas Chauvet of Citi.
Good evening, Cécile and Rodolphe. My first question on Asia, it's Japan and the -5%. Could you give us a rough indication of Greater China versus the other Asian markets? In the past, you gave a lot of color on these other Asian markets, which sometimes perform quite well. How was, in that Chinese cluster you gave earlier, the onshore versus offshore performance? Secondly, on the other fashion houses, beyond Louis Vuitton and Christian Dior, it looks the creative change has benefited Christian Dior more than Celine, Loewe, or Fendi. Is that a function of the greater investments and efforts you've put very early on at Christian Dior? Are you now ready to support these other three smaller houses, in a similar way to return to growth in 2027?
Just coming back thirdly on the F&L margins, you protected margin in H2 last year and H1 2026, at constant FX, despite a single-digit revenue decline, thanks to the cost reduction efforts you've mentioned. Is that effort still continuing in H2, or is it more difficult to protect margin at constant FX? I understand the message you gave on FX, but with that kind of revenue decline, because you've come to the end of that, perhaps that cost reduction cycle. Thank you.
Thank you. On the clienteles, you have the Chinese demand, which has been negative mid-teens. Japanese have been down mid-single digit negative, and the rest of the Greater Chinese part has not changed a lot versus the previous quarter. On offshore versus onshore, for the Chinese cluster, offshore was negative mid-single digit. Onshore, a decline double digits, so a bit more than the cluster average. In both cases, the quarter-on-quarter swing perfectly mirrors the comp base. Sequentially, it has been a bit better at the end of the quarter, as I mentioned. LV, Dior, Celine, Loewe, Fendi. It is not that we are not happy that I did not get the question, but thank you for asking. As I mentioned earlier, Celine is getting a very nice traction on recently launched soft bags.
It is also double-digit in shoes, getting great momentum in the U.S., so it is progressing very well, and we are very confident that Celine is now getting the right level of traction to become a growth driver for us. Fendi, as you know, Maria Grazia has been the latest to change, so you need, again, to wait a bit of a season so that it takes gradually part in the mix.
As mentioned, Rodolphe, the Baguette Fendi that was tweaked with a softer material is doing well, and we are quite confident. On Loewe, we are starting to see areas and pockets of momentum, especially on some of the recently launched bag. It is a journey. Overall, we are quite encouraged by the results on the different brands. It is a question of maturity. It is a question of growing in the mix for the newness. But we are encouraged.
On the margin, yes, we are working on cost, obviously, as you know. Short-term cost-cutting has its limits. It does not bring sales, but it also has its limits, and efficiency and pursuing sustainable efficiency, as we had the opportunity to discuss, takes a bit more time. I am not sure we can fully offset the short-term top-line pressure, but we keep pushing, and we will keep pushing until the last day for improvement.
The next question is from Luca Solca, Bernstein.
Yes. Good evening, and thank you for taking my questions. One question to clarify where you see Louis Vuitton in the current situation. Do you feel that you have what it takes in terms of product and mix to address the market and, in particular, a more difficult market in China and elsewhere, I presume, when it comes to the aspirational middle class?
Comparing and contrasting, that's my second question, Louis Vuitton and Christian Dior, we saw that the revival of Christian Dior has followed a method of injecting significant new creativity, so changing creative directors, appointing Jonathan Anderson, and letting Jonathan leverage the equity of the brand with newness and with excitement. Where do you stand when it comes to the opportunity to improve Louis Vuitton? Do you think that an incremental approach is more appropriate in this case, or do you envisage a more significant action to move the brand forward?
Thank you, Luca. On your first question, what we can say is the top-down deterioration of the context was abrupt, and our bottom-up response are being more gradual and still working progress. But yes, they are effective. I mentioned a few. I mentioned Christian Dior, that is materially outperforming year-to-date with newness as you mentioned, but also with declination of different format and material on some bags, which is working well on the mix as well. I cited Celine also. Celine, which is getting a good success on the newly launched bags, and also shoes double digit. On Louis Vuitton, I gave a few examples. What we need, because we are all agreeing that to counter a macro that is deteriorating, we need to increase and to sharpen self-help initiative and bottom-up execution, and that's exactly what we are doing.
When it comes to Vuitton, I think, first, Vuitton has been the most resilient brand for a long time. I think the work we're doing in ensuring that we have the right balance between elevation on one side and recruitment on the other side is the right strategy. You can be tempted, when there is deterioration, to go for a very tactical or drastic change or things that are a bit disruptive. In our case, what we need absolutely to do is continue to be hitting the sweet spot between desirability on one hand and perceived value on the other hand. So it's really about finding the differentiated design that stay fresh. It's about ensuring that functionality, material are in tune with the zeitgeist.
It's about ensuring that we pay attention to all clusters of customers geographically, by age cohort, by income cohort, and that's really what we need to deploy in a very consistent manner. We've been seeing and having debates on what could be some more drastic immediate moves, like price cuts. We don't believe this is something that is advisable, because whatever you do, you need to keep in mind the desirability of your brand and making sure that what you do can endure momentum for the next cycle to come. So yes, it take a bit of time, but I don't think there are a lot of shortcuts here. Again, I gave many examples that I hope will give you the proof that self-help initiatives are working. So we'll continue to do that.
Thank you.
The next question is from Edouard Aubin, Morgan Stanley.
Hey, good evening. Thank you for taking my questions. Cécile, just to come back on the performance by brand, I know you've said a lot already, but just to make sure I understood correctly, I think you mentioned that Dior was more or less flattish in the third quarter. I think obviously Loro Piana and Rimowa should have remained positive, and Louis Vuitton just below the average. So would that be fair that the rest, Givenchy, Fendi, Celine, et cetera, would be down kind of in the high single digit? I know you're limited in terms of what you can say brand by brand, but if you could clarify a little bit. Just related to that, do you confirm that Dior is up at constant FX over the past nine months? Because in the presentation, you talked about good growth over the past nine months.
So if you could just confirm that. So that would be question number one. Question number two, it's not an easy one to answer, but if you look at the history of LVMH, fashion leather goods had sometimes a few difficult quarters because of the headwinds and the macro top-down, but it would seem to be that the division has been underperforming and potentially losing share on a kind of trailing 12 - 18 months. How do you explain this new situation, which basically never really happened before at LVMH? Then the last one on watches and jewelry. So you commented on the headwinds for Q4 in terms of the comps and then the lower price impact. If we keep the kind of two-year stack constant, we get to basically a flat growth for the division.
I know you guys don't like to guide, but would that be kind of in the ballpark what you have in mind in terms of what we should expect for Watches & Jewelry in the fourth quarter? Thank you very much.
Thank you, Edouard. On the performance by brand, maybe I can repeat what I said. Jewelry is outperforming overall. Yes, it's positive year-to-date. It's not flattish on the Q3, it's flat, which is a big difference in the language we're all using, but it can be a big difference. The rest is Loro Piana is still enjoying a very strong growth. Rimowa is also an outperformer. And the rest is Celine is doing better. That's what we had said. F&L had sometimes difficult quarters. Yes, it had. The good news is that it didn't last. I don't think we can compare a world that is changing so fast to any other situation, but it's definitely clear that if something has been proven is a skill set and a track record.
What we've been seeing this quarter, obviously in term of macro news and change in backdrop for Chinese consumer is delaying a bit the recovery, but there's nothing structural or specific that would impair the recovery. It's just going to take a bit more time. Again, what I said is, in order to respond to that, you need to ensure you have the right level of initiatives and bottom-up execution. That's what we will be continuing to focus on and to do. On Watches & Jewelry, what I can say for Q4 overall is that for Bvlgari, the basis of comparison, sorry, will be tougher than it was in Q3, so that might have an impact on the performance. But we expect growth to continue in Watches & Jewelry, obviously.
Next question.
The next question is from Viktoria Petrova, Barclays.
Thank you very much. I have two clarification questions. One, looking at the exit rate in the beginning of Q4, is any region getting better or any nationality getting better once compared to Q3? Or if there is anything getting worse as well? Obviously, we also have Chinese offshore tax getting in action at the end of October. Any observations there? Do you think the market environment would get tougher or easier for you? Just one follow-up. When we look at Watches & Jewelry quarter-on-quarter, there was a decline from 11% - 6%. Is it purely pricing or is it also U.S. comps? If you could comment on Tiffany performance within Watches & Jewelry. Has it been accelerating or decelerating quarter-on-quarter? Thank you so much.
Thank you. On the exit rate for beginning of Q4, or at least for end of Q3 and the month of September, it was better than the average of the quarter overall and better for the Chinese cluster. Very difficult to predict the market environment and what might be the reaction of some to certain news or certain macro decision. We can hope that it will subside, but we are definitely planning to sharpen our bottom-up execution in the cases it does not.
On Watches & Jewelry, quarter-on-quarter, it is also about U.S. comps. As I said, Tiffany had a bit of a tougher comp base in Q3. So it is part of the slowdown. It does not mean that there is a structural slowdown, because as I said, the icons continue to perform very well in term of growth, with Sixteen Stone and Vertu Constellation as well gaining momentum.
We still have the legacy business that is underperforming and the silver. Overall, we are going according to plan. So, no specific worry there. It is mostly a movement in the basis of comparison and short-term impact.
And we'll take another two questions.
The next question is from Jean Danjou, Oddo BHF.
Thank you. Good evening. I had two questions. The first one is about local demand in Europe. If I'm not mistaken, you said that the cluster was up slightly for F&L in Q3, but at the group level, there was a quite strong sequential improvement of 4 points in the growth. So was it that other divisions in Europe were basically enjoying an acceleration Q3 compared to Q2? The second one is about FX. You commented already there was an impact to expect in the second half is negative. In light of recent developments on FX that are very positive for EUR-based companies, would it be fair for us now to assume that FX could be a significant positive in 2027, sales-wise and margin-wise? Thank you.
Thank you, Jean. On EU in Q3, yes, the local demand was positive, moderate growth overall. There was strong performance also in other divisions, like Sephora is doing very well in Europe in Q3. Wine and Spirit as well, with the champagne, which are going very well in Europe. So it's quite broad-based in term of division and performance, and watches and jewelry as well. On the FX, it's true that on top line, as of Q3, the FX impact turned positive. It's not exactly the same timing when it comes to margin. That's why, again, in H2, we're going to have a negative impact in term of FX. For next year, it should ease, with the exception of Wine and Spirit, where you have a delay in stock, so you might have a delayed impact of getting this positive into the margin.
And last question.
The next question is from Zuzanna Pusz, UBS.
Good evening. Thank you for taking my questions. I have just two quick ones left. First of all, maybe for your margins, but I guess, obviously, I know you don't have a crystal ball, but can you remind us what is more or less the A&P spend for the Fashion Leather Goods division, as of last year or versus the history? And given your comments that there is obviously a limit to cost-cutting, and I think LVMH has historically been known for really thinking about the long-term investing in the brands. I was just wondering, do you think that your marketing spend is at the right level, or maybe given all of the self-help initiatives, you may have to step up a little bit in order to give more of a spotlight to all of the work you're doing around the brands?
So that's my first question. And second one is very quickly on retail network. Correct me if I'm wrong, but I think there's been some commentary in the press, which obviously can always be selective, about some store closures for Louis Vuitton in China. So would you be able to tell us where you are in terms of the retail network development for Fashion Leather Goods or maybe Louis Vuitton? Because what we tend to see historically is that after very strong growth, brands tend to open more stores, and then when we go for a slowdown, there's a bit of a consolidation. So just to get an idea of where we are in that cycle. Thank you.
Sure. On A&P and marketing spend, overall, as a percentage of sales, it has not changed a lot between years, so it remained quite stable. But of course, it will depend on the agenda of the maison. For example, if you go with a change in creative, obviously, you will invest in order to ensure that you activate all the levers to give the best chance in order to double down on the start. It is very difficult to answer as an average. I am not sure. It is very meaningless, but we are very mindful of not cutting for short-term margin benefit, not to cut anything that would or might deteriorate anything in the brand desirability or building the long-term momentum, so that you can be fully reassured on that. On the store closure in China for Vuitton, yes, it was picked up somehow.
One week later, we were opening another one in Chongqing. Overall, the surface has not changed over the past 12 months. I think it is a very healthy behavior to be managing our store networks dynamically and always asking ourselves the question on, "Is it the best one? Can we relocate?" We are doing that very pragmatically at the end of leases. One store that is good for one brand might be better for another one tomorrow. So it is very active. I think it is quite best in class when it comes to managing the network, and it is very healthy. Again, in China, we opened Chongqing, Rodolphe Ozun mentioned it, and it has been off a very good start. So overall, we will continue to do like that. Again, it depends on the brands and on the agenda. So it is something that is dynamic.
It is very difficult to be theoretical about this answer. Thank you for all your questions. Maybe one word, because we will be welcoming everyone to the Journées Particulières that will open in a few days. We hope to see you there. It is really a unique opportunity to enter into the heart of our maison and brands and witness their unique savoir-faire, which this industry is all about. So I hope you will be a lot to join. Thank you very much.
Thank you.