People are walking by the Louis Vuitton storefront building in Lisbon, Portugal, on July 21, 2024.
Luis Boza | Nurphoto | Getty Images
Shares in the world’s largest luxury group LVMH fell on Wednesday after its second-quarter sales came in below analyst consensus on Tuesday.
LVMH shares were last down by 4.5% at 10:04 a.m. London time. Other luxury sector stocks, including Gucci-owner Kering which is set to report earnings on Wednesday, also retreated.
Quarterly sales came in at 20.98 billion euros ($22.7 billion) in the second quarter, compared to the 21.6 billion euros LSEG analysts were expecting.
Sales in Asia, excluding Japan, fell 14% in the second quarter from the same period a year earlier, LVMH said. Sales in the region had declined 6% in the first quarter of 2024.
Meanwhile, sales in Japan jumped 57% year-on-year in the three months to the end of June.
Across the first half of the year, sales in Asia excluding Japan dropped 10% compared to the first six months of 2023, while sales in Japan rose by 44%, LVMH said.
The company said the “exceptional growth” in Japan across the first half of the year was boosted “in particular from purchases made by Chinese travelers.” Japan was among the strongest regions for the fashion and leather goods, perfumes and cosmetics and watches and jewellery divisions over this time, LVMH added.
By business groups, wine and sprits revenue fell 5% in the second quarter of 2024 from a year earlier, and the watches and jewellery division declined 4% over the same time.
Across the first half of the year, “Europe, the United States and China were the regions most affected by lower consumer demand” in the wines and spirits division, LVMH noted, adding that the market environment in China has been “unfavorable.”
Weakening demand in China has been weighing on the broader luxury goods sector for several quarters, as the world’s second-largest economy continues to grapple with the fall-out from the Covid-19 pandemic.
LVMH is the latest luxury brand to report weak performance this year, with Hugo Boss cutting its 2024 guidance, and Burberry issuing a profit warning earlier this month.
