fall after a first quarter deemed disappointing

(Boursier.com) — LVMH Trugging from 8% to 487.5 euros the day after a quarterly point below expectations and a wave of analyst adjustments. The world number one luxury achieved a turnover of 20.3 billion euros in the first quarter, with withdrawal of 2% over a year and in organic decrease of 3%. The fashion and leather goods activity, the most important for the group which represents more than three -quarters of the operating profit, displays an organic withdrawal of 5% to 10.1 billion euros but LVMH stresses showing good resistance while the first quarter of 2024 benefited from the strong growth of purchases in Japan. Watches and jewelry activities, perfumes and cosmetics as well as selective distribution are presented as stable in this first quarter. Wine and spirits activity (Champagne Krug and Cognac Hennessy) weighs on the dynamics with an organic drop in sales of 9% to 1.3 billion euros.

In the geopolitical and economic context disturbed of this beginning of the year, LVMH remains both vigilant and confident. The owner of the Brands Moët & Chandon and Louis Vuitton still counts on the diversity of its professions and the good geographic balance of its sales to further strengthen its advance on the world market for high quality products.

Reacting to this publication, the Deutsche Bank (‘keep’) lowers its target from 580 to 565 euros. It is now obvious that the fourth quarter has been an anomaly for LVMH, declares the analyst, who underlines the greater slowdown than expected of perfumes and cosmetics and Sephora, suggesting a certain weakness in the most ‘demanding’ consumers. The fear of a slowdown in the luxury sector in the United States, although widely shared by investors, does not seem to have confirmed in the first quarter. The slowdown in the fashion and leather goods division is mainly due to the weakness of the Chinese pole. Bernstein (‘outperformance’) notes that the presentation conference has been fully focused on demand in the United States given customs duties. The company’s response has left “many disappointed” because it has not found any impact on American demand in the last weeks of March.

Telsey Advisory Group (‘outperformance’) reduces its target from 820 to 715 euros. The organic drop in sales has been higher than expected, even if Europe is the positive point of this publication. Despite short -term disruptions, LVMH has some of the most solid luxury brands in the world and manages them for their long -term success. RBC (‘outperformance’) brings back its objective from 750 to 680 euros. The analyst writes that investors’ concerns concerning the underlying recovery of demand should be “amplified” on the basis of this report. The broker reduces its EBIT forecasts for the 2025 financial year by 8%, with a “more pronounced” drop in the first half. It expects the lower than expected results of LVMH, the sectoral reference, have a negative impact on the whole luxury.

Finally, Morgan Stanley degrades the title to ‘online weighting’ and lowers its target price from 740 to 590 euros. The bank talks about a slower start to the year than expected for the key and leather goods division, and now provides for a turnover contraction over the whole year similar to that of 2024. The second quarter should experience a new sales contraction, China continuing to be a major brake and the sector being confronted with a gloomy macroeconomic environment.

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