Business

The luxury sector continues to grow in the third quarter of 2022

The Kering, Hermès and L'Oréal groups recently published their figures for the third quarter of 2022. After a summer driven by tourism in Europe, the luxury groups see their growth continue in a remarkable way.

Isabella Hübscher

By Isabella Hübscher25 octobre 2022

The Kering, Hermès and L'Oréal groups report an increase in results in all their geographical areas (Shutterstock)

After the announcement of the giant LVMH which continues its growth, the other luxury players confirm the good sales dynamics within the sector for the third quarter of 2022. Indeed, despite the uncertain geopolitical context and rising inflation, luxury consumers do not seem to be discouraged.

Kering announces a turnover of 5.1 billion euros for the third quarter of this year, up +14% compared to 2021, at constant exchange rates. Compared to the same period in 2019, sales increased by +28%. The group led by François-Henri Pinault recorded growth in all markets, with a remarkable performance in Western Europe (+74%) and Japan (+31%). The United States saw weak growth of +1%, in line with LVMH's declining results in the US market. These figures are explained, among other things, by the strong contribution of American customers to the growth of the European market, as purchasing tourism has returned. Results in Asia-Pacific, although impacted by health restrictions in mainland China, remained solid with an increase of +7%.

While Gucci, the group's flagship house, announced revenue growth of +9% compared to 2021, it was the Yves Saint Laurent brand that recorded the most remarkable performance with a +30% increase in revenue. Indeed, its sales in the own network, driven by all product categories, were up 38%, and activity in Western Europe more than doubled compared to the previous year. Bottega Veneta also saw its sales increase by +20%, as did Kering Eyewear and Corporate (+21%).

The Hermès group announced a positive third quarter in terms of sales (+24%), with a turnover of 8.6 billion euros, also up by +24% compared to 2021. All of the company's business lines confirmed their strength, with continued solid growth in Watches (+55%), led by the development of pieces such as the Arceau watch, Le Temps voyageur, and the new H08 watch. The Clothing and Accessories category recorded significant growth (+38%), followed by the Silk and Textiles (+27%), Perfume and Beauty (+18%) and Leather Goods and Saddlery (+13%) branches. It should be noted that the group has announced strong price increases for 2023, of 5% to 10%.

Like Kering, the Hermès group published positive results in all markets. While Asia excluding Japan (+34%), Japan (+21%), Europe excluding France (+25%) and France (+28%) recorded results more or less comparable to LVMH and Kering, the performance of the American market varied considerably. While LVMH's results were down, and Kering announced almost zero growth, Hermès saw this market increase by +28%. New shops in Austin, New York, as well as a major event in Los Angeles justify these figures.

In the cosmetics industry, the leading group in the sector, L'Oréal, also posted a sustained growth (+9.1%) in turnover in the third quarter, reaching 9.5 billion euros. "The global beauty market remains dynamic and consumer appetite for beauty products is intact," commented Nicolas Hieronimus, Chief Executive Officer of L'Oréal.  The Active Cosmetics division recorded the strongest growth (+26%). In parallel, L'Oréal Luxe, penalised by repeated confinements in China, posted growth of only +4.6% in the third quarter. Nevertheless, the division is growing faster than the global luxury beauty market, with growth of +12.2% in the period to 30 September 2022.

In terms of geographical areas, L'Oréal reported growth in all markets, including Europe (+10.5%), North America (+9.3%), Latin America (+16.2%) and North Asia, with very low growth of +0.3%. In the group's SAPMENA-SSA market (South Asia, Pacific, Middle East, North Africa and Sub-Saharan Africa), significant growth of +30% was recorded. In Sub-Saharan Africa (SSA), the Active Cosmetics Division achieved spectacular growth, with the successful launch of CeraVe in the various countries of the region.

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