PARIS (Reuters) – LVMH shares fell on Wednesday, dragging down the entire luxury goods sector after the company missed expectations with a 3% drop in sales in the third quarter, heightening investor concerns about consumer appetite for luxury goods.
LVMH shares fell about 7% in early trading. Also in the industry Kering (EPA :), whose brands include Gucci, lost 5.2%, and L’Oreal fell by 4.3%.
Late Tuesday, LVMH reported its first quarterly sales decline since the pandemic as demand weakened in China and Japan.
Chinese consumer confidence has fallen to its lowest level since the Covid-19 pandemic, the company told analysts late on Tuesday, noting a “marked deterioration” in the business of its fashion and leather goods division, home to Louis Vuitton and Dior, and buyers in mainland China.
“LVMH’s third-quarter stock update was unreassuring, suggesting that trends are actually milder than feared,” wrote investment bank JP Morgan, which maintained a “neutral” rating on LVMH.
China is a major source of concern for luxury investors. China’s stimulus measures briefly stoked hopes for an economic recovery that remains elusive.
($1 = 0.9189 euros)
