Revenue from the spirits and cognac segment of LVMH fell by 5% in Q1 2023 as Hennessy Cognac sales dipped in China and the U.S., the company reported yesterday in its first quarter revenue earnings report.
LVMH’s wine and spirits arm, Moët Hennessy, was the only segment of the world’s largest luxury company to not record double-digit organic revenue growth.
Overall, wine and spirits saw revenue rise by 3% to $1.9 billion, driven by the champagne business. But the spirits segment fell to $993 million, down from $1 billion. Hennessy cognac volumes dipped due to softening economic conditions and high stock level among distributors caused by “various disruptions” at the end of the year.
Demand for cognac is also in gradual recovery in China, as the impact of the pandemic still lingers, according to LVMH. But the company said Hennessy cognac showed resilience against the economic environment in the U.S. The group also recorded solid revenue growth for Belvedere vodka and Glenmorangie Whisky.
Hennessy, one of the largest cognac producers, launched two high profile collaborations during the first three months of the year. Last month, the Hennessy XO and Kim Jones collection debuted with a collectible sneaker, a decanter and an XO bottle designed by the fashion designer. The company’s crown jewel cognac, Paradis, kicked off a marketing campaign with singer Alicia Keys in February.
The luxury giant overall saw total sales increase by 17% organically during the first quarter. The company was targeted by French workers protesting against pension reforms, who stormed the LVMH Paris headquarters today.