LVMH shares rise after luxury giant’s Q1 sales offer element of reassurance
4:05 am Wednesday, April 17th, 2024
PARIS (Reuters) -LVMH shares rose on Wednesday, after first quarter sales figures from the world’s largest luxury group offered an element of reassurance to investors concerned about the industry’s outlook, particularly in China.
LVMH shares were up by around 2% in early session trading.
On Tuesday, LVMH reported that sales for the quarter ending in March rose 3% on an organic basis to 20.69 billion euros ($22 billion), matching analysts’ expectations.
“The market environment is challenging, especially in China, and LVMH was able to navigate it in line with expectations,” said Mario Ortelli, of luxury advisory firm Ortelli & Co.
LVMH, which is Europe’s second-largest listed company and worth nearly 400 billion euros, is the first luxury goods maker to report quarterly sales at a time of growing concern over slowing growth in No.2 economy China.
Gucci-owner Kering last month issued a surprise warning that first-quarter sales would slump 10%, with sharp declines in Asia, casting uncertainty over the outlook for the sector.
LVMH, owner of brands such as Louis Vuitton, Tiffany & Co. and Bulgari, said its Asia sales, excluding Japan, were down 6%, but that purchases by Chinese shoppers globally had grown 10%.
“Even the much-debated (Fashion & Leather Goods) division met investors at the bar, +2% bang in line with our and market’s expectations, possibly enough to reassure the more cautious investors,” said analysts at J.P.Morgan.
The division, which includes Louis Vuitton and Dior, has been closely eyed for signs that rising prices could curb demand for high end products such as handbags that cost thousands of dollars.
Hermes shares were up 1% on the back of LVMH results.
($1 = 0.9414 euros)
(Reporting by Mimosa Spencer and Dominique Patton; Editing by Sudip Kar-Gupta and Sharon Singleton)
