MC: LVMH Stock Recovers After Weak Sales Indicate Luxury Sector Pullback

Revenue for the French luxury sophisticate dropped 2% from last year, landing below analysts’ consensus calls.

Key Points:

• LVMH posted first-quarter revenue.
• Company did not disclose earnings.
• Shares are up a good 12% this year.
• Luxury giant LVMH MC reported first-quarter revenue below estimates, indicating a mild pullback in the high-end fashion sector. The French conglomerate posted a 2% drop in revenue for the March quarter at €20.7 billion ($22 billion), sliding below analysts’ consensus views for €21 billion ($22.3 billion). LVMH skipped profit results as it discloses earnings figures only twice a year.
• The company blamed shifting foreign exchange moods for the drop, saying that organic revenue, which excludes currency moves, rose 3%. In Japan, for example, sales exploded by 32% thanks to a weaker Japanese yen. But Chinese demand for luxury goods declined by 6%. Wines and spirits, with brands such as Henessy and Moët & Chandon, fell the most — 12% — as not many people popped champagne bottles.
• LVMH signed off on its weakest quarter by sales growth since the pandemic boom, which boosted the company’s valuation above $500 billion. Despite the slowdown, the luxury group, controlled by the family of the world’s richest person Bernard Arnault, has performed well so far this year. Shares erased yesterday’s 1.6% drop early in today’s session and are floating up by 12% on the year.