The shares of the world's largest fashion company LVMH (MC.FR) are losing value early in today's session after third-quarter results this year pointed to further weakness in Chinese consumers, who are not as eager to buy luxury goods. LVMH's organic sales in the region including China fell 16%.
Analysts lowered their price targets on the shares and said the lackluster results suggested that the industry-wide slowdown was deeper than expected. Shares of peers also fell after the French company signaled an uncertain economic and geopolitical backdrop, which does not bode well for the rest of the reporting season.
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- Telsey Advisory Group (outperform, cuts PT to €750 from €800)
- Jefferies (hold, PT lowered to 560 euros from 600 euros)
- Deutsche Bank (hold, PT lowered to 670 euros from 750 euros)
- Bryan Garnier (buy, PT lowered to 800 euros from 835 euros)
Luxury goods stocks are also down: Hermes (RMS.FR) -1.7%, Gucci-owner Kering (KER.FR)-1.9%, Brunello Cucinelli (BC.IT) -1.5%, Moncler (MONC.FR) -2.9%, Burberry (BRBY.UK) -2.0%, jeweler Richemont (CFR.CH) -1.4%. Source: xStation
THIRD QUARTER RESULTS
- Organic revenue -3%, estimated +0.93%
- Fashion and leather goods organic sales -5%, forecast +0.48%
- Wine and spirits organic sales -7%, forecast -2.41%
- Perfumes and cosmetics organic sales +3%, forecast +4.26%
- Watches and jewelry organic sales -4%, estimated -3.71%
- Selective retail organic sales +2%, estimated +5.09%
- Revenues €19.08 billion, -4.4% y/y, estimated €20.05 billion
- Fashion and leather goods revenue €9.15 billion, -6.1% y/y, estimated €9.74 billion
- Wine and spirits revenue €1.39 billion, -8.2% y/y, estimated €1.47 billion
- Revenues from perfumes and cosmetics €2.01 billion, +1% y/y, estimated €2.07 billion
- Revenue from watches and jewelry €2.39 billion, -5.5% y/y, estimated €2.43 billion
- Selective retail revenue €3.93 billion, -3.7% y/y, estimated €4.25 billion
The company's shares began trading with a downward gap, which, by its extent, brought the stock down towards the minimums of September this year. The scale of the sell-off has since been partially reduced, however. Source: xStation
