LVMH Moët Hennessy - Louis Vuitton (LVMHF) Q3 2026 Earnings Call

0:01 Ladies and gentlemen, good afternoon and welcome to today's conference call. I'm Rodolphe Voisin, Director of Financial Communications and with me is Cecile Cabanis, our Chief Financial Officer. Cecile 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, Cecile 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 2 of our presentation, which is available on the LVMH website, lvmh.com. Let's now move on to today's topic, our 9-month figures, and passing over to Cecile.

0:47 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.

1:32 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 US, 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 57.1 billion euros, up 2% organic, down 2% on a reported basis. The reported figure includes a negative 3% currency impact and a negative 1% perimeter impact from the disposal of additional GFS assets and the sale of Marc Jacobs closed on September 1st.

2:29 As shown on chart 5, the geographic revenue mix remains entirely stable versus the same period last year. So again, a very balanced geographical footprint with US representing 25%, Asia 27%, and Europe 26%. Moving to slide 6, 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 explains the mid-single-digit decline that you see. Europe, on the other hand, accelerated markedly, driven by improving trends across all divisions. Finally, the US and Japan, up 5 and 6% respectively, were slightly above yesterday's average, with fairly consistent trends in the US, more uneven in Japan, but mostly due to very uneven comparison basis. Rodolphe will now take you through a division performance in more detail.

3:42 Thank you. Thank you Cecile and as usual we'll start with wines and spirits. Slide 9 shows the wines and spirits business group delivered 4 billion euros 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 negative 2% currency effect. Broken down, champagne and wines generated 2.2 billion euros in revenue over the nine months period, up 6% organic and up 3% reported. And cognac and spirits recorded 1.8 billion euros in revenue, up 4% organic and up 2% reported over the nine months period.

4:31 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 foreign 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. Auxerre Wines enjoyed a strong summer season in Europe, supporting tangible volume growth in the third quarter, and Chandon enjoyed strong US demand and a good response to its new garden spritz collection.

5:28 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. And in the US, we're 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 26.4 billion euros for the first 9 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.

6:21 Announce slide 13, after CEC's introduction, the quarter was marked by a more challenging consumer backdrop in Asia, whilst US 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 scion 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.

7:08 Finally, the quarter saw the opening of a new store in Chengchun in China, which is off to a good start, and recent flagship re-openings 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, and a new house of Dior renovated by Peter Marino also opened in Milan mid-September. Finally, L'Orfiana and Rimowa continue to enjoy above-average momentum, and elsewhere, the creative renewal of our brands is yielding encouraging results, exemplified by the success of the soft Triomphe at Céline, the new Baguette at Fendi, women ready-to-wear collections at Givenchy, or the new Amazona 180 at Loewe, to give a few examples.

8:12 Moving to perfumes and cosmetics, on site 15, revenue reached 5.9 billion euros for the first 9 months. This is flat on an organic basis and down 2% on a reported basis. after taking into account a negative 2% currency impact. Turning to slide 16, which lists some of the proclamations by our Maison. To summarize the quarter, I would say once again, our historic Maison, notably Parcin-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 Barcin-Revet and Maison Francis-Curdian.

8:57 By region, Asia and Japan enjoyed good momentum and the Middle East remained resilient and 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. Now on watches and jewellery, I'm on slide 18, revenue rose to 7.7 billion euros in the first 9 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 Side 19 Jewelry recorded an excellent performance year-to-date, supported by growth across geographies, and our maisons make good progress on strategic priorities.

9:52 Tiffany's iconic lines, for instance, Hardware 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 store renovation plan with now 40% of stores renovated also are performing significantly. In high jewellery, the Hidden Garden collection has been well received and contributed to the continued growth of the high jewellery segment. Bowery enjoyed another quarter of strong momentum thanks to the growing success of iconic lines Serpenti Diva and B01 and good success in watches, notably Serpentier and Octo which are adding further to its momentum.

10:39 The Maison also unveiled its Auroboros art installation on the New York High Line as a part of New York Fashion Week, its 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. Now, to discuss our last business group, Selective Retailing on slide 21. Revenue in the first nine months came to 12.5 billion euros, 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 GFS disposals.

11:40 And moving to slide 22, Sephora continues to excite worldwide with growth across all regions, notably its two largest markets, the US 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 continue to resonate for example with the brand Road which just launched with Sephora in Europe and Sephora more recently announced the launch of TikTok in the US and Marks and Spencer a partnership in the UK to help expand its reach with customers and complements existing footprint.

12:25 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 and 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 Phallic Group all of which resulted in a 7% perimeter impact on the division in G3.

12:54 Thank you, Rodolphe. So, 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. And on that front, we are seeing progress across our brands. Louis Vuitton keeps gaining traction on recently launched products across its price pyramid. We can go back on that later. Dior is now outperforming across geographies, double-digit with the American clients earlier today.

13:40 Celine is improving fast and building real momentum in the US. 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 & Spirit posted mid-single-digit growth for a third straight quarter, proof that the team's efforts are paying off. While the environment got tougher, the group continues to grow in the third quarter supported by its regional balance and diverse portfolio. And finally, share buyback continued and amounts to 2.3 billion euros for the first nine months of 2026.

14:32 Thank you for your attention. We are now ready for your questions. 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 1 under touchtone telephone. The first question is from Chiara Battistini, JP Morgan.

14:57 Good morning and 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. And as you mentioned, Cilda, we would go back to the product pipeline and the pyramid of LV. If you could give us any update on the strategic actions you're taking on the product and innovation for LV specifically. The second question is 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.

15:42 And 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 I'll try my luck. Thank you.

16:02 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-based. Obviously, as always, you have outperformers. In the Q3, it's the case of Fior. 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. Vuitton was also impacted by a one-off logistics and transportation disruption from one of our freight forwarders, 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.

17:00 Regarding pipeline and innovation for LV, so I obviously won't unveil all the products that are today in the pipe. What we can already say is that self-help are delivering and we continue to work making sure that we strike the right balance between elevation and recruitment. So 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 emblem or the silk teak which is this new material getting quite a good success.

17:56 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's on the waiting list. Rodolphe mentioned that as well. We have jewelry doing well. And on the other side of the spectrum, perfume continues to do well. So indeed, to counter the macro short-term pressure, it's absolutely necessary that bottom-end execution and self-help are there, and so what we have started to do is delivering, we need more and more will come.

18:49 On watches and jewelry slowdown, so the first explanation is the same as for everyone, by the way it's for the industry and even beyond, it's the slowdown macro-led from Chinese demand. and the fact that the consumers were less inclined to spend on discretionary goods. So this is one of the explanations. We had also, even if it's still growing very nicely, some slowdown in the US between Q2 and Q3. There was a bit of tougher basis of comparison for Tiffany, for example. Overall, on watches and jewelry, we still have a very good growth.

19:37 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 hardware and notes, but also joining them for this quarter, the Six Stone and Bird on the Rock, which are performing well. We are still having some legacy business that is weighing on the performance but overall it's doing well and we are very confident. And then on Bulgari there's really a broad-based performance so we are very happy with that. Bulgari is really basing his whole strategy on his high-end positioning but able to launch new lines that are more accessible and enables also recruitment and volume, so it's been a great journey for Bulgari.

20:38 On margin implication, which is your third question, So the first technical item which is something we mentioned in H1 is that FX will remain a headwind around 70 bps similar to H1 so 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. So we can't probably fully offset the short-term top-line pressure, but we are keeping and pushing on every level we can for improvement.

21:29 The next question is from Charles-Louis Scotti, Café Chevreux.

21:34 Yes, good evening and thank you for taking my questions. The first one, would you be able to comment on the exit rate for fashion and leather goods? As you mentioned that there has been a deterioration of the Chinese consumer backdrop at the very beginning of the quarter, and it's been the case also at the end of the quarter and during the Middleton Festival and the Golden Week. And do you think the October 27 deadline for the payment of taxes on offshore trusts in China and potentially the US mid-term elections could have an impact on the demand also in Q4? My second question is on this one-off logistic issue at Louis Vuitton.

22:20 Just to make clear, you mentioned that it has had an impact of one percentage point. Were you referring to the Louis Vuitton getting sales goals or the overall fashion and the goods division? And finally, on jewelry, I would be interested in understanding the contribution from pricing, which I suspect is close to around 10%. Are you planning to implement further price increase in October? And if not, should we expect growth to slow down further as you start tracking the significant price increases implemented in October last year? Thank you.

22:58 Thank you, Charles-Louis. So maybe a response to your technical question. I was mentioning the impact of the logistic disruption that we had in Q3. It's for Louis Vuitton, so it's a bit more than one 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 need to continue to come.

23:54 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.

25:03 On the pricing on watches and 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. So 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. And in Q4 you need to have in mind that the basis of comparison will be a bit tougher for Bulgari which was performing very well in Q4 last year.

25:49 Next question. The next question is from Antoine Verge, BNP Paribas.

25:56 Yes, hello, good evening. It's Antoine at BNP. So, three questions, if I may. You already gave a bit of flavor on the slowdown on fashion and leather, but out of the six points of deceleration, if all is attributed to the Chinese cluster, and I think the Chinese cluster was flat, The previous quarter, so would it be down around 20% or are there maybe some kind of a slowdown maybe in the U.S. or elsewhere? On my second question about China, you mentioned the macro and the use flow. You didn't allude to the Moliti controversy, especially if the exit rate is a bit better, maybe the impact of that is probably disappearing. So would you agree on that?

26:47 And also, you were 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. So did that create a bit of a tough phase also for you? So if you could maybe comment a bit more about what you're doing in terms of clientele. And finally, on Dior. Do you consider that you're on track or isn't it a bit disappointing not to see a stronger growth now that there are more products from the new designers in store? Thank you.

27:41 Thank you Antoine. So maybe the best way to answer your first question is to give you a bit of details around clientele. So as you hinted, the macro news flow that led to a rapid shift in consumer Chinese backdrop translated in Chinese demand and meetings. American clientele, by contrast, held up well at mid-single digits. Europeans were up modestly. Japanese and Middle Eastern were down mid-single digits. And if your figures don't fully reconcile, it's because the minus 5 is a small minus 5. It's much closer to minus 4.5.

28:34 So 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 terms of logistics for Vuitton impacted the most. But otherwise, the clientele is up in a very healthy way and growing nicely. and all the other clientele overall between Q2 and Q3 remained unchanged so no big move there. On your question on Moliti, very difficult to size a precise impact but the net-net it's probably fair to say that it had a negative impact at least at the beginning of the quarter.

29:36 On your mention regarding Q3 last year, the self-help and the vote, and is it now putting a heavier comparison basis? I think it's very interesting to come back on the Louis because, you know, it's one store. So you make the count and you look at how big it can be in terms 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 and for the brand it continues to create a halo in terms 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.

30:46 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, is creating impact across brands, 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, Moët Hennessy is getting good results in all categories.

31:32 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're 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 Oboe or like Deux Cigales on the higher end and 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 The next question is from Erwan Rambour, Goldman Sachs.

33:03 Yeah, hi. I hope you can hear me. Erwan Rambour, Goldman Sachs. So maybe a follow-up on Vuitton. Is it the case that, following Monliti, 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? And 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 don't know how you express it, percentage of his products within the brand or potential for this to go higher? And then maybe if you can mention between Celine Fendi, Givenchy or others, Thank you Erwan, you are talking very fast.

34:17 So on the first question regarding Vuitton and Moly, no, we are not stopping investing because there was the Moly-T topic and I think let's maybe park Moly-T and really focus on the current macro pressure because the truth and its broad base is that there was a shift in Chinese consumer backdrop and this forces us to sharpen our self-help effort and 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.

35:13 On logistics, 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.

36:01 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 icons in the future. So it takes a bit of time but it yields short-term benefits. I was mentioning the Hobo. So we are very confident with Dior. Again, and 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 is gradually increasing in your mix with all the new design and initiatives.

36:51 C'est Pour En, Life for Life versus Reported, so first let me take this opportunity to To say a few words on Sephora which had, as Rodolphe said, a very good performance again this quarter and it's really broad-based on markets, it's 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. The next question is from Thomas Chauvet, Citi.

37:40 Good evening, Cecile and Adolphe. My first question on Asia and Japan and the minus 5. 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. And how was, in that Chinese cluster you gave earlier, the on-show versus offshore performance? Secondly, on the other fashion houses beyond Vuitton and Dior, it looks the creative change has benefited Dior more than Céline Louévé. or Fendi, is that a function of the greater investments and efforts you've put very early on at Dior and are you now ready to support these other three smaller houses in a similar way to return to growth in 27?

38:35 And just coming back thirdly on the FNL margins, you protected margin in H2 last year NH126 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 Thank you.

39:17 Thank you. So on the clientele, you have the Chinese demand which has been negative mid-teens. Japanese has 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 declined double digit, so a bit more than the cluster average. In both cases, the quarter on quarter swing perfectly mirrors the comm space.

40:06 And sequentially, it's been a bit better at the end of the quarter, as I mentioned. LV Dior, Céline Hueve-Fendi, no it's not that we are not happy that I didn't get the question but thank you for asking as I mentioned earlier Céline is getting a very nice traction on recently launched soft bags It's also double-digit in shoes, creating great momentum in the US, so it's 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.

40:57 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. But as mentioned, Rodolphe, the baguette candy that was tweaked with a softer material is doing well and we are quite confident. And on Ouévé, we're starting to see areas and pockets of momentum, especially on some of the recently launched bags. So it's a journey, but overall we are quite encouraged by the results on the different brands. It's a question of maturity, it's a question of growing in the mix for the newness, but we are encouraged.

41:51 On the margin, Yes, we are working on cost. Obviously, as you know, short-term cost-cutting has its limits. It doesn't bring sales, but it also has its limits. And efficiency and pursuing sustainable efficiency, as we have the opportunity to discuss, takes a bit more time. So I'm 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 Lucas Solka Bernstein.

42:42 Yes, good evening and thank you for taking my questions. One question to clarify where you see 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 Vuitton and Dior, we saw that the revival of 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.

43:43 Where do you stand when it comes to the opportunity to improve 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?

44:06 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 Dior that is materially outperforming year to date with newness as you mentioned but also with declination of different formats and material on some bags which is working well on the mix as well. I cited Céline also, Céline which is getting a good success on the newly launched bags and also choose double digit and on Vuitton I gave a few examples. So what we need because I mean we all we are all agreeing that to counter a macro that is deteriorating we need to increase and to sharpen self-help initiative and bottom-end execution and that's exactly what we what we are doing.

45:21 When it comes to 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.

46:17 So it's really about finding the differentiated design that stays fresh. It's about ensuring that functionality, materials are in tune with the zeitgeist. And 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 end your momentum for the next cycle to come. So yes, it takes a bit of time, but I don't think there are a lot of shortcuts here. And 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.

47:38 Thank you. The next question is from Edouard Aubin, Morgan Stanley.

47:43 Hey, good evening. Thank you for taking my questions. Cecile, sorry, just to come back on the performance by Brian, 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, L'Opiana and Rimoba should have remained positive and Vuitton just below the average. So, would it be fair that, you know, the rest, you know, the Givenchy, Fendi, Celine, etc., 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, and just related to that, do you confirm that you're always up at constant effects over the past nine months? Because in the presentation, you talk about good growth over the past nine months.

48:28 If you could just confirm that, so that would be question number one. Question number two, and so 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 to 18 months. and kind of you know if how do you explain you know this new situation which basically never really happened before at LVMH and then the last one on watches and jewelry so you commented on you know you know the headwinds for Q4 in terms of you know 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 and jewellery in the fourth quarter? Thank you very much.

49:35 Thank you, Edouard. So on the performance by brand, maybe I can repeat what I said, which is Joe is outperforming overall. So yes, it's positive year to date. It's not flattish on Luxus 3, it's flat, which is a big difference in the language we're all using, but it can be a big difference. So then the rest is Loro Piana is still enjoying a very strong growth. Rimova is also an outperformer. So this is what and the rest is Céline is doing better. So that's what we We had said FLNG had sometimes difficult quarters.

50:31 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 the skill set and the track record. What we've been seeing this quarter obviously in terms 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.

51:24 So that's what we will be continuing to focus on and to do. On watches and jewelry, what I can say for Q4 overall is that for Bulgari, the basis of comparison will be tougher than it was in Q3, so that might have an impact on the performance. But we expect those to continue in watches and jewelry, obviously. Next question. The next question is from Victoria Petrova, Barclays.

52:10 Thank you very much. I have two clarification questions. One, looking at the exit rate and 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? So do you think the macro environment would get tougher or easier for you? And just one follow-up. When we look at watches and jewelry, quarter on quarter, there was a decline from 11% to 6%. Is it purely pricing or is it also U.S.

52:55 comps? And if you could comment on Tiffany's performance within Watches & Jewelry. Has it been accelerating or decelerating quarter on quarter? Thank you so much.

53:12 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.

53:57 In the case, it does not. And on watches and jewelry, quarter on quarter, it's also about US comps. As I said, Tiffany had a bit of a tougher comp base in Q3. So it's part of the slowdown. It doesn't mean that there is a structural slowdown because, as I said, the icons continue to perform very well in terms of growth. with Sixteen Stone and Verdun de Roque as well gaining momentum. We still have the legacy business that is underperforming and the silver but overall we are going according to plan so no specific worry there.

54:46 It's mostly movement in the basis of comparison and short-term impact.

54:54 And we'll take another two questions. The next question is from Jean Danjou, OdoBHF.

55:04 Thank you. Good evening. I have two questions. The first one is about local demand in Europe. If I'm not mistaken, you said But the cluster was up slightly for FNL in Q3, but at the group level there was a quite strong sequential improvement of four points in the group. So was it that other divisions in Europe were basically enjoying an acceleration Q3 compared to Q2? And then the second one is about FX. You commented already there was an impact to expect in the second half, it is negative. In light of the recent developments on FX that were very positive for euro-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.

56:01 Thank you, Jean. On EU in Q3, yes, the local demand was positive, moderate growth overall, and there was strong performance also in other divisions, like Sephora is doing very well in Europe in Q3, Wine & Spirits as well with the Champagnes, which are going very well in Europe. So it's quite broad based in terms 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.

56:46 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 terms of and then 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.

57:14 And last question. The next question is from Susanna Puth, UBS.

57:21 Good evening. Thank you for taking my questions. I have just two quick ones left. First of all, maybe further on 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 spent for the fashion leather goods division, I don't know, as of last year or versus the history? And, you know, given your comments that there is obviously a limit to cost-cutting, and I think LVMH has historically been known for really, you know, thinking about the long-term investing in the brand. So I was just wondering, do you think that, you know, your marketing standards at the right level or maybe given all of the self-help initiatives, you know, you may have to step up a little bit in order to kind of, you know, give a more of a spotlight to all of the work you're doing around the ground.

58:09 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 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 Vuitton? Because, you know, 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, you know, where we are in that cycle.

58:45 Thank you. Sure. On ENP and marketing spends, 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. So it's very difficult to answer as an average, I'm not sure it's 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.

59:56 On the store closure in China for Vuitton, yes, it was picked up somehow. One week later we were opening another one in Shenzhen. Overall the surface has not changed over the past 12 months. I think it's a very healthy behavior to be managing our store network dynamically and always asking ourselves the question on It is the best one. Can we relocate? And so we're doing that very pragmatically at the end of leases. And one store that is good for one brand might be better for another one tomorrow. So it's very active. I think it's quite best in class when it comes to managing the network and it's very healthy. And again, in China, we opened Changchun.

1:00:52 Rodolphe mentioned it. and it's been of a very good start. So overall we will continue to do like that and again it depends on the brands and on the agenda so it's something that is dynamic. It's very difficult to be theoretical about this answer. Thank you for all your questions and maybe one word because we'll be welcoming Everyone to the Journée Particulière that will open in a few days. We hope to see you there. It's really a unique opportunity to enter into the heart of our Maisons and brands and witness their unique savoir-faire which this industry is all about.

1:01:42 So I hope you will be a lot to join. Thank you very much.

1:01:48 Thank you.