PARIS (Reuters) – Shares in luxury goods giant LVMH (MC.PA) are on track to post their biggest one-day drop in a year on Wednesday. The move came after luxury goods giant LVMH missed third-quarter sales expectations, dragging down the entire sector and erasing gains from China’s economic stimulus. Stimulus package.
The stock was down about 4% in recent trading after falling as much as 7% in early trading. Smaller rival Kering, which owns brands such as Gucci, fell 3%, Hermès 1.7% and L’Oréal 4.3%.
LVMH, which owns brands such as Moët & Chandon champagne, Louis Vuitton fashion and Tiffany & Co. jewelry, late Tuesday reported its first quarterly sales decline since the pandemic due to weaker demand in China and Japan. Recorded.
The company told analysts that consumer confidence in China had fallen to its lowest level in the coronavirus era, and pointed to a “significant deterioration” in its fashion and leather goods business, home to Louis Vuitton and Dior. It noted that the segment’s sales in mainland China have declined moderately. Single digit percentage.
Investment bank J.P. Morgan said, “LVMH’s third-quarter trading update is not reassuring and suggests trends are softer than actually feared,” rating LVMH stock. remained “neutral”.
China’s demand weakness is likely to be felt across the industry, adding: “We don’t think anyone is completely immune.”
China is a major concern for investors in the luxury goods sector. Stimulus measures temporarily raised hopes for an economic recovery, but high-end stocks have fluctuated wildly as expectations have changed.
Analysts have been cutting their forecasts for the sector in recent weeks, with low expectations for the third quarter, with UBS expecting organic sales to fall 1% year-on-year, the worst outlook in four years. did.
Kering will announce its quarterly sales on October 23rd and Hermès on October 24th.
(1 dollar = 0.9189 euro)
(Reporting by Mimosa Spencer, Dominic Patton, Piotr Lipinski and Amanda Cooper; Editing by Barbara Lewis and Mark Potter)
