PARIS (Reuters) -LVMH shares sank on Tuesday after the world’s largest luxury group posted first quarter revenue that undershot expectations as U.S. shoppers curtailed the purchase of beauty products and cognac while sales in China remained weak.
LVMH shares dropped 5.2% in early trading, dragging down shares of rival luxury goods companies such as Kering and Hermes.
On Monday, LVMH reported a 3% decline in first-quarter sales – well below analyst expectations for 2% growth, providing the first glimpse that luxury companies could face another tough year following President Donald Trump’s recent tariff announcements, which have sparked fears of a recession.
The performance pointed to “a more difficult trading environment for the broader luxury sector,” said RBC analyst Piral Dadhania, who lowered his organic sales forecast for LVMH this year to flat from growth of 3% expected previously, citing the 4% first-quarter sales miss.
Improvement at the end of 2024 now seems an anomaly as LVMH’s key fashion and leather goods business, home to the Louis Vuitton and Dior brands, reverted to 5% sales declines, noted Deutsche Bank.
(Reporting by Mimosa Spencer and Tassilo Hummel;Editing by Sudip Kar-Gupta and Bernadette Baum)
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