Guiony said high-end goods from LVMH’s highest priced brands remain strong in the U.S., most likely due to wealthier people who are less vulnerable to factors like inflation, student debt, and the greater economy, according to CNBC. The segment that took the biggest hit was wine and spirits, particularly Cognac. The company said that maintaining inventory was difficult during the pandemic, which made pricing and supply difficult to control.
Another reason given for the poor sales in the U.S. was the depletion of stimulus payments amid Covid-19. “If we assume that that group was benefitting from subsidies during Covid, those come to an end at some point,” Guiony said, according to CNBC. Guiony also speculated that Americans traveled to Europe for vacations and bought their luxury goods in Paris, Rome, or London. Supporting that assertion was the fact that the company’s Europe sales increased 18 percent in the second quarter, with tourists being responsible for nearly half of that amount. Last year, the company saw the same trend of Europe consuming sales in America.
But again, LVMH has been kept in good shape due to Asia’s booming business. China’s sales rose 24 percent in the first half of the year, though it should be noted prior sales were at base levels due to coronavirus lockdowns,“Last year, the group was pulled up by the United States because China was slowing down.