PARIS (Reuters) – LVMH climbed on the Paris Stock Exchange on Friday, and with it the entire luxury sector, after publishing better than expected results the day before which reassured investors about the sector’s resistance to the economic slowdown, particularly in China.
At 4:52 p.m., the French luxury giant’s shares soared 13.64% to 778.8 euros, adding 48 billion euros to its market capitalization. The stock is heading towards its strongest daily increase since September 2001.
In the process, Hermès advanced by 6.11% and Kering by 7.79%. The luxury sector in Europe is up 6.9%.
LVMH, which owns brands such as Louis Vuitton, Christian Dior and Tiffany, published sales of nearly 24 billion euros in the fourth quarter of 2023, thanks to demand for its high-end products which remains resilient.
Organic growth reached 10%, above the analyst consensus of 9% cited by HSBC.
“The most high-end products are those with the highest demand in the world,” LVMH CEO Bernard Arnault told analysts.
This publication was all the more reassuring since LVMH had reported in October, during its third quarter results, a clear slowdown in its sales with the weakening of demand in the United States and Europe, and a recovery sluggish in China.
Chinese customers’ appetite for European luxury brands has been a concern for investors in recent months. China’s housing crisis and high youth unemployment have dimmed the prospect of a rapid rebound in the world’s second-largest economy from the COVID-19 pandemic.
If Chinese tourists no longer arrive en masse in Europe, LVMH still attracts the wealthiest travelers. “We are not particularly worried,” assured LVMH financial director Jean-Jacques Guiony.
“The diversification of activities within the group, as well as operational flexibility and agility, in our view demonstrate the high quality of LVMH and should support the stock” in the short term, JPMorgan analysts underlined in a note.
(Written by Corentin Chappron, with Mimosa Spencer in Paris, Josephine Mason and Lucy Raitano in London, edited by Blandine Hénault)
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