LVMH Shares Decline Following Disappointing Q2 Sales Report

Shares of LVMH, the world's largest luxury goods conglomerate, experienced a significant drop of 4.7% on Wednesday after the company reported second-quarter sales that fell short of analyst expectations. The luxury giant's sales totaled 20.98 billion euros ($22.7 billion), missing the anticipated 21.6 billion euros, as analysts had predicted. This disappointing performance has also impacted other luxury brands, including Kering, the owner of Gucci, which is set to announce its earnings soon. The sales figures revealed a troubling trend in Asia, excluding Japan, where LVMH reported a 14% decline in sales compared to the same period last year. This follows a 6% drop in the first quarter of 2024. In contrast, Japan showed remarkable growth, with sales soaring by 57% year-on-year in the second quarter, largely driven by purchases from Chinese travelers. Overall, sales in Asia, excluding Japan, fell by 10% in the first half of the year, while Japan's sales rose by 44%. LVMH highlighted that the exceptional growth in Japan was a standout performance for its fashion, leather goods, perfumes, cosmetics, and watches divisions. However, the company faced challenges in its wine and spirits segment, which saw a 5% revenue decline in the second quarter, alongside a 4% drop in watches and jewelry. The luxury sector continues to be affected by lower consumer demand, particularly in Europe, the United States, and China, where the market remains unfavorable post-Covid-19.