Shares in LVMH Moët Hennessy Louis Vuitton, the world’s biggest luxury goods retailer and Europe’s second-most valuable company by capitalisation, tumbled after the French group reported weaker sales growth – further evidence that the post-pandemic boom in luxury goods is losing steam.
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Organic revenue at the crucial fashion and leather goods division, which includes brands such as Louis Vuitton and Christian Dior, rose 9 percent in the third quarter, below analysts’ expectations and half the pace recorded in the first six months. Sales at the wines and spirits unit fell 14 percent, well above the decline analysts had expected.
In total, the group’s revenues rose by 9% year-on-year in the third quarter to 19.96 billion euros. Analysts were anticipating total revenues of around 20.6 billion euros.
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“After three exceptional years, growth is converging to figures that are closer to the historical average,” said LVMH’s chief financial officer, Jean-Jacques Guiony, during the quarterly presentation, quoted by Bloomberg.
LVMH shares tumbled as much as 8.5 percent on the Paris stock market in early trading on Wednesday, the biggest intraday drop in nearly two years.
Around 13:20 (Romanian time), the shares depreciated by 6.5%, to 687 euros. Shares of rivals including Hermes International and Gucci owner Kering SA were also down.
The benchmark CAC 40 index of the Paris stock exchange recorded a decline of 0.5%. The Stoxx Europe 600 was up 0.1%, supported by modest gains in British and German shares.
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LVMH, one of investors’ favorite stocks in recent years, lost its luster this summer as China’s recovery fell short of expectations and demand from U.S. consumers slowed.
The luxury group’s market value has fallen by around 110 billion euros from a peak of more than 500 billion euros reached in April. Last month, LVMH lost its position as Europe’s most valuable company to Danish drugmaker Novo Nordisk.
2023-10-11 13:00:22
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