Shares in LVMH slipped 1.5 per cent yesterday after the French luxury giant’s second-quarter results failed to reassure investors that a broader recovery in luxury demand was firmly underway, despite signs of improvement at its key fashion and leather goods division.
The results left open the question of whether the luxury sector is emerging from a prolonged downturn, with growth at LVMH’s most profitable business still falling short of expectations.
LVMH, the owner of fashion brands Louis Vuitton and Dior, said fashion and leather goods sales rose 1pc on an organic basis to $10.12 billion in the second quarter. While that marked the segment’s first quarterly increase in two years, it missed analysts’ expectations for growth of 1.7pc.
The group reported overall organic sales growth of 3pc for the quarter, helped by an 11pc increase at its watches and jewellery division, its fastest-growing business.
LVMH shares are trading near six-year lows and have lost about 30pc of their value this year, reflecting investor concerns over the pace of any recovery in luxury demand.
Kering shares are down around 17pc so far this year, while Hermes has dropped 21pc.
The two groups’ results, yesterday and today respectively, will be closely watched for further signs of whether luxury demand is recovering after a prolonged slowdown.
LVMH said tourism-related spending in Europe was affected by the conflict between Israel and Iran.
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