A photograph taken on April 23, 2024 shows a view of the new Louis Vuitton luxury shop belonging to French luxury group LVMH Moet Hennessy Louis Vuitton SA, on the Champs Elysee avenue in Paris.
Julien De Rosa | Afp | Getty Images
Shares of LVMH dropped 5% on Wednesday after slightly better-than-expected annual results from the world’s largest luxury company threw doubt over a broader recovery in the luxury sector.
The owner of brands including Louis Vuitton, Moët & Chandon and Hennessy posted revenues of 84.68 billion euros ($88.27 billion) for 2024, exceeding the 84.38 billion euros forecast by LSEG analysts and equating to organic growth of 1% versus the previous year.
Shares were down 5.26% by 8:24 a.m. London time.
Investors have been looking for further confirmation of a recovery in the luxury sector after Cartier owner Richemont reported its “highest ever” quarterly sales figure over the festive shopping period. However, declining sales in LVMH’s critical fashion and leather goods and wines and spirits segments pointed to continued pressure within the group.
LVMH on Tuesday attributed its revenue growth to solid demand within its selective retailing division — which includes retailer Sephora — and perfume and cosmetics. Growth was also broadly driven by consumers in the U.S., Europe and Japan, while the wider Asia Pacific region — and notably China — lagged.
The French luxury goods giant is seen as a bellwether for the wider luxury industry, which has faced significant pressure over recent years amid declining China sales and broader macroeconomic headwinds.
This is a breaking news story and will be updated shortly.