People walk past the Louis Vuitton store building on July 21, 2024 in Lisbon, Portugal.
Luis Botha | Noor Photos | Getty Images
Holds shares in the world’s largest luxury goods group LVMH The company fell on Wednesday after second-quarter sales fell short of analysts’ expectations on Tuesday.
LVMH shares last fell 3.96% at 11:30 a.m. London time. Other luxury goods industry stocks also fell, including Gucci owner Kering, which is due to report earnings on Wednesday.
Second-quarter sales were 20.98 billion euros ($22.7 billion), compared with LSEG analysts’ expectations of 21.6 billion euros.
LVMH said sales in Asia excluding Japan fell 14% year-on-year in the second quarter. Sales in the region fell 6% in the first quarter of 2024.
Meanwhile, sales in Japan increased 57% year-on-year in the three months to the end of June.
LVMH said that in the first half of this year, sales in Asia excluding Japan fell by 10% compared with the first six months of 2023, while sales in Japan increased by 44%.
The company said Japan’s “exceptional growth” in the first half of the year was driven by “particularly purchases by Chinese tourists.” LVMH added that Japan was one of the strongest regions in the fashion and leather goods, fragrances and cosmetics, and watches and jewelry sectors during this period.
By business category, the wine and spirits revenue in the second quarter of 2024 decreased by 5% year-on-year, and the watch and jewelry department decreased by 4% in the same period.
LVMH pointed out that in the first half of this year, “Europe, the United States and China were the regions most affected by the decline in consumer demand” in the wine and spirits division, adding that the market environment in China was “unfavorable”.
Weak demand in China has been weighing on the broader luxury goods industry for several quarters as the world’s second-largest economy continues to grapple with the fallout from the Covid-19 pandemic.
LVMH is the latest luxury brand to see weak results this year, Hugo Boss Cutting 2024 Guidance,Burberry Issue a profit warning earlier this month.
