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Shares of luxury goods giant LVMH (MC.PA, LVMUY) fell to their lowest levels in over two years after missing third quarter estimates. The decline was primarily attributed to continued weakness in Chinese consumer spending, a crucial market for luxury brands.
The disappointing results from the parent company of Louis Vuitton, Dior, and Tiffany & Co. triggered a broader sell-off across the luxury sector, impacting peers such as Hermès (RMS.PA), Kering (KER.PA), and Richemont (CFR.SW).
Catalysts Anchor Seana Smith breaks down the details.
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This post was written by Angel Smith
Sticking with China. Shares of LVMH plunging to the lowest level that we've seen in more than two years after the luxury goods maker missed estimates on weakness in the Chinese consumer. Organic sales for the unit, and that includes Louis Vuitton and also Dior, that declined 5% during the third quarter. It's the worst quarterly performance for the unit since the second quarter of 2020. Shares of peers in the luxury space also moving to the downside rattled by fears that industry-wide pressures, especially from the Chinese consumer, could possibly be worse than expected. During their quarterly presentation, the company's CFO saying, quote, most of our markets currently face economic challenges, specifically calling out mainland China. A string of analysts slashing their price targets on LVMH's stock after the results. Jeffries noting recent Chinese stimulus efforts will likely have little impact on the tough industry backdrop. Deutsche Bank writing that the industry still expects a rebound in the cyclical downturn, though is uncertain about the timing of that turnaround.
