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LVMH Shares Decline Amid Mixed Annual Results
A recent photograph taken on April 23, 2024, highlights the newly opened Louis Vuitton luxury store of the renowned French luxury group LVMH Moët Hennessy Louis Vuitton SA, located on the famous Champs-Élysées avenue in Paris.
Shares of LVMH experienced a downturn on Wednesday following the release of annual results that, while slightly exceeding expectations, raised questions regarding the momentum of recovery in the luxury sector.
The luxury conglomerate, which is home to prestigious brands such as Louis Vuitton, Moët & Chandon, and Hennessy, reported revenues of 84.68 billion euros (approximately $88.27 billion) for 2024. This figure surpassed the forecast of 84.38 billion euros made by analysts from LSEG, representing an organic growth rate of 1% compared to the previous year.
As of 8:38 a.m. London time, LVMH shares had plummeted by 5.79%. Other luxury brands also witnessed declines, with Kering and Christian Dior falling by 6.65% and 5.71%, respectively.
Investors have been keenly awaiting signs of a recovery in the luxury market, especially after Cartier’s parent company, Richemont, announced record quarterly sales during the festive shopping season. However, LVMH’s disappointing sales performance in its vital fashion and leather goods, as well as wines and spirits segments, indicates ongoing struggles within the organization.
LVMH attributed its revenue growth primarily to robust demand in its selective retailing segment, which includes renowned retailer Sephora, along with its perfume and cosmetics offerings. The company reported increased sales largely driven by consumers in the United States, Europe, and Japan, while the Asia Pacific region, particularly China, showed weaker results.
Considered a bellwether for the luxury industry, LVMH has faced significant challenges in recent years due to diminishing sales in China and broader macroeconomic pressures. Despite the current fluctuations, LVMH shares have risen about 14% since the beginning of the year. Notably, earlier this month, the company reclaimed its status as Europe’s most valuable enterprise, overtaking Danish pharmaceutical leader Novo Nordisk.
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