LVMH shares fall as China weakness drags on sales
LVMH missed third-quarter revenue forecasts, with its core Fashion and Leather Goods division shrinking more than expected. The underperformance in the handbag segment and Asia drove a 2.5% drop in shares.
LVMH reported third-quarter revenue growth of 1%, missing analyst expectations of 1.5%. The core Fashion and Leather Goods division shrank organically by 5%, significantly worse than the expected decline of 1.6%. Revenue in Asia excluding Japan fell by 5%. Other segments performed better, with Sephora growing 8% and Wine & Spirits up 6%. Following the earnings release, LVMH shares lost 2.5% in the US market.
The underperformance in the handbag segment, a key driver for investors, was the primary cause of the negative market reaction. The company's results highlight the continued pressure on luxury goods demand in key Asian markets, particularly China, despite strength in other regions and product categories.