Janice R. Andrews
The French company LVMH’s Selective Retailing unit was the brightest spot in its first-quarter earnings. Organic sales increased by 11%, with Sephora experiencing “remarkable growth” at the front of the pack. LVMH’s overall sales rose by 3%, indicating worries that the demand for luxury goods may be slowing down in tandem with economic expansion.
Over the past quarter, Sephora’s retail network experienced notable growth, mostly in the US but also in Europe and the Middle East. In spite of this, international travel to important destinations like Hong Kong and Macau is returning slowly, which is why the Selective Retailing division’s duty-free business is still below its pre-Covid activity levels.
Cosmetics and perfumes experienced a 7% increase as well, with fragrances remaining popular. Dior fragrances fared well, particularly the well-known Sauvage, J’Adore, and Miss Dior collections.
Positive effects were also seen from Maison Francis Kurkdjian’s Baccarat Rouge 540’s viral success. Dior and Guerlain skincare and cosmetics also contributed to this expansion.
Given its tenacity, this sector might offer some respite to the beauty business, which has been struggling ever since Ulta Beauty executives signaled in March that demand was declining in both prestige and mass markets. Ulta’s shares fell sharply as a result of the company predicting first-quarter profits at the lower end of its range. This had an impact on Coty and E.l.f. Beauty as well as other beauty companies.
