Shares of LVMH, the world's largest luxury goods group, plummeted 7% following a surprising decline in first-quarter sales. Analysts from Citibank noted that the sales figures were "overall below even the most conservative buyer expectations," with wine and spirits experiencing the steepest drop.
LVMH reported a 3% year-over-year decrease in sales for the first quarter, contrary to analysts' expectations of slight growth. The wine and spirits division saw a 9% decline due to reduced demand for cognac in countries like the U.S., affected by geopolitical tensions. The fashion and leather goods segment, which accounted for 78% of profits in 2024, fell by 5%, while watch sales remained flat.
Despite overall market gains, LVMH's performance negatively impacted the luxury sector, with Kering shares down 2.5%, Burberry down 4.2%, and Richemont down 2.26%. Citibank analysts expressed concerns over LVMH's future revenue improvement amid ongoing economic uncertainties in the U.S. and globally. Jefferies analysts also lowered the company's stock target price from 670 euros to 510 euros.
LVMH is facing challenges from U.S. trade policies, which could affect supply chains and consumer demand. The company is the first major European luxury firm to release its quarterly results since the announcement of potential tariffs.
