A weaker-than-anticipated revenue report was the key factor that led to a decline in the American depositary shares of LVMH Moët Hennessy — Louis Vuitton (LVMUY) on Monday. The luxury goods manufacturer experienced a drop of over 6% in its ADS price, which stood in stark contrast to the 0.8% increase observed in the S&P 500 index on the same day.
On Sunday, LVMH released information regarding its first-quarter revenue, revealing a total of just over 20.3 billion euros ($23.1 billion) for the period. This represented a 3% decrease compared to the previous year and fell short of the consensus analyst estimate of $24.1 billion.
The decline was reflected across most of the company’s divisions. The fashion and leather goods segment, which is the company’s largest revenue contributor, experienced a 5% decline compared to the first quarter of 2024, generating $11.5 billion. The selective retailing category, which is second in terms of revenue, decreased by 1% to $4.8 billion, while the watches and jewelry division saw slight improvement to just under $2.8 billion.
In its selective financial disclosure, LVMH attributed these declines to a broadly “disrupted geopolitical and economic environment.” Chief Financial Officer Cécile Cabanis elaborated during a conference call that a significant factor affecting sales was linked to the previous year’s demand from Chinese consumers in Japan. This demand surge followed the weakening of the yen, which had temporarily boosted sales in the region.
Overall, the downturn in LVMH’s performance is attributed to unfavorable currency dynamics and a challenging economic climate for luxury retailers globally, as ongoing global trade tensions have led to a general reduction in consumer spending. This has prompted investors to respond negatively by selling their shares.
