People walk by the Louis Vuitton storefront building in Lisbon, Portugal, on July 21, 2024.
Luis Boza Nurphoto Getty Images
Shares in the world’s largest luxury group LVMH fell on Wednesday after second-quarter sales fell below analysts’ consensus on Tuesday.
LVMH shares were last down 4.5% at 10:04 am London time. Other luxury sector stocks, including Gucci-owned Kering which is set to report earnings on Friday, also retreated.
Quarterly sales came in at 20.98 billion euros ($22.7 billion) in the second quarter, compared to the 21.6 billion euros LSEG analysts were expecting.
Sales in Asia, excluding Japan, fell 14% in the second quarter from the same period a year earlier, LVMH said. Sales in the region fell 6% in the first quarter of 2024.
Meanwhile, sales in Japan rose 57% year-on-year in the three months to the end of June.
In the first half of the year, sales in Asia excluding Japan fell 10% compared to the first six months of 2023, while sales in Japan rose 44%, LVMH said.
The company said the “extraordinary growth” in Japan in the first half of the year was boosted “mainly by purchases made by Chinese tourists.” Japan was one of the strongest regions for its fashion and leather goods, perfumes and cosmetics and watches and jewelry divisions during this period, LVMH added.
According to the business group, wine and spirits revenue fell 5% in the second quarter of 2024 from a year earlier, and the watch and jewelry division fell 4% over the same period.
In the first half of the year, “Europe, the United States and China were the regions most affected by lower consumer demand” in the wine and spirits division, LVMH noted, adding that the market environment in China had been “unfavorable.”
Weakening demand in China has weighed on the wider luxury goods sector for several quarters, as the world’s second-largest economy continues to grapple with the Covid-19 pandemic.
LVMH is the latest luxury brand to report a weak performance this year, with Hugo Boss cutting its 2024 guidance, and Burberry issuing a profit warning earlier this month.