PARIS (Reuters) – LVMH shares fell on the Paris stock market on Wednesday, after the luxury group reported lower-than-expected third-quarter sales as inflation and economic turmoil dented consumer appetite for high-end fashion.
The stock lost 5.89% at 07:18 GMT, its biggest drop in session since March 2020, with the CAC 40 falling 0.5%.
“The exceptional dynamic (after the pandemic) was not going to last forever and a “normalization” was expected, the consensus having been re-established and the stock having fallen before the publication of the results,” note Berenberg analysts.
“The pace of normalization in the sector has been the subject of much debate in recent weeks: LVMH has confirmed that this normalization is underway, and perhaps at a slightly faster pace than was anticipated last month “, adds JPMorgan.
The weak sales were “particularly due to weak sales of wines and spirits,” according to one analyst.
RBC, for its part, believes that the outlook for 2024 “remains unclear and that the negative earnings revisions are probably not over”.
The decline of the French group is dragging the rest of the luxury sector in its wake: Kering and Hermès fell by 1.33% and 1.97% respectively, while Burberry lost 3.68%, and the Swiss Richemont and Swatch dropped 4. 48% and 1.88%.
The luxury sector index fell by 2.9%, compared to an increase of 0.17% for the Stoxx 600, and is heading towards its biggest drop in one session since the beginning of September.
(Written by Corentin Chappron, Gaëlle Sheeran, edited by Kate Entringer)
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