PARIS, July 23 (Reuters) – LVMH sales growth slowed in the second quarter due to a decrease in spending by Chinese shoppers. Despite this, Western markets showed slight improvement. This LVMH sales slowdown reflects shifting consumer behavior globally.
Sales at the world’s biggest luxury group and owner of labels Louis Vuitton, Tiffany & Co. and Hennessy, grew to 20.98 billion euros ($22.8 billion), a 1% rise on an organic basis, which strips out currency effects and acquisitions. #LVMHsalesslowdown
That compares to a 3% rise year-on-year in the first quarter, and double-digit growth in 2023 when consumers in key market China splurged on luxury goods as they emerged from pandemic lockdowns.
LVMH, Europe’s second-largest listed company worth around 340 billion euros, released its report. This follows profit warnings from Burberry and Hugo Boss last week.
Though LVMH sales undershot expectations for revenues of 21.6 billion euros, according to an LSEG poll based on six analysts, it was seen as largely priced in.
“All in all, this shouldn’t be an insurmountable problem, given the minimal size of the miss and the significant pullback the LVMH share price has suffered since the initial post 4Q23 reporting euphoria,” said Luca Solca, analyst at Bernstein.
LVMH shares have been volatile since the luxury slowdown began. Over the past year, they are down about 20%. Concerns about middle-class shoppers in China, affected by a property slump and job insecurity, contribute to this decline. #LVMHsalesslowdown
LVMH offered “no nasty surprises,” said Piral Dadhania, RBC analyst.
Its sales in Asia, excluding Japan, fell by 14% in the second quarter. This reflects the broader LVMH sales slowdown trend. The decline worsened from a 6% drop in the first quarter.
