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Business of Fashion
22-05-2025
- Business
- Business of Fashion
LVMH Said to Signal Continued Weakness on China Woes
LVMH is warning investors and analysts that demand remains soft after the luxury conglomerate missed revenue estimates for the first three months of the year, people familiar with the matter said. With a view to managing expectations, LVMH Moët Hennessy Louis Vuitton SE is putting out cautious signals on second-quarter trends amid lacklustre consumer confidence, particularly in China, according to the people, who declined to be identified discussing information that's not public. Some of the people suggested the company's current quarter may show no improvement over the previous one. The luxury market is struggling to emerge from a period of sluggishness caused in part by shoppers reining in costly purchases in China, which has been a crucial growth engine for industry majors from LVMH and Chanel to Hermes and Richemont. The industry's outlook has grown even gloomier since US President Donald Trump last month began to impose tariffs on imports across industries and countries. It is common for listed companies like LVMH to brief investors and analysts in conferences, meetings or calls about their business trends after publishing results. LVMH posted its first quarter sales results on April 14. The company didn't immediately have a comment. LVMH shares tumbled as much as 2.9 percent in Paris. In the first quarter, LVMH's revenue in the region that includes China fell 11 percent on an organic basis and recorded a similar drop for all of 2024. Preliminary analyst estimates show sales for Asia Pacific excluding Japan in the second quarter may slide by 6.4 percent, while the key fashion and leather goods unit, which includes Louis Vuitton and Christian Dior, may see revenue fall 3.7 percent, according to data compiled by Bloomberg. This division generates the bulk of LVMH's profitability. The region that includes China accounts for 30 percent of LVMH's total sales, while the US garners 24 percent. Shares of the French group have dropped by about 22 percent so far this year amid demand worries in China as well as concerns that Trump's tariffs will weigh on consumer spending in the US. Competitors such as Hermes International SCA and Cartier owner Richemont SA, that have been a bit more resilient, have seen their shares rise over the same period, while Gucci-owner Kering SA has tumbled 24 percent. Out of nearly 40 analysts tracked by Bloomberg who cover LVMH, only one has a sell recommendation. The average target price for its stock is €608.80 ($689.36), which is about 20 percent higher than its current price. By Angelina Rascouet and Julien Ponthus Learn more: LVMH Shares Have Lost Their Lustre The luxury giant's stock market valuation is languishing at the bottom of its five-year range, but that still hasn't proved enough of a markdown to lure back investors.
Business Times
21-05-2025
- Business
- Business Times
LVMH said to warn of continued luxury weakness on China woes
[PARIS] LVMH is warning investors and analysts that demand remains soft after the luxury conglomerate missed revenue estimates for the first three months of the year, sources familiar with the matter said. With a view to managing expectations, LVMH Moet Hennessy Louis Vuitton is putting out cautious signals on second-quarter trends amid lacklustre consumer confidence, particularly in China, according to the sources, who declined to be identified discussing information that's not public. Some of the sources suggested the company's current quarter may show no improvement over the previous one. The luxury market is struggling to emerge from a period of sluggishness caused in part by shoppers reining in costly purchases in China, which has been a crucial growth engine for industry majors from LVMH and Chanel to Hermes and Richemont. The industry's outlook has grown even gloomier since US President Donald Trump last month began to impose tariffs on imports across industries and countries. It is common for listed companies such as LVMH to brief investors and analysts in conferences, meetings or calls about their business trends after publishing results. LVMH posted its first-quarter sales results on Apr 14. The company did not immediately have a comment. LVMH shares tumbled as much as 2.9 per cent in Paris. In the first quarter, LVMH's revenue in the region that includes China fell 11 per cent on an organic basis and recorded a similar drop for all of 2024. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Preliminary analyst estimates show sales for Asia-Pacific excluding Japan in the second quarter may slide by 6.4 per cent, while the key fashion and leather goods unit, which includes Louis Vuitton and Christian Dior, may see revenue fall 3.7 per cent, according to data compiled by Bloomberg. This division generates the bulk of LVMH's profitability. The region that includes China accounts for 30 per cent of LVMH's total sales, while the US garners 24 per cent. Shares of the French group have dropped by about 22 per cent so far this year amid demand worries in China as well as concerns that Trump's tariffs will weigh on consumer spending in the US. Competitors such as Hermes International and Cartier owner Richemont, that have been a bit more resilient, have seen their shares rise over the same period, while Gucci-owner Kering has tumbled 24 per cent. Out of nearly 40 analysts tracked by Bloomberg who cover LVMH, only one has a sell recommendation. The average target price for its stock is 608.8 euros, which is about 20 per cent higher than its current price. BLOOMBERG
CNBC
21-05-2025
- Business
- CNBC
Canada Goose beats estimates, pulls full-year guidance on 'macroeconomic uncertainty'
Shares of Canada Goose rose around 8% on Wednesday after the company reported fiscal fourth-quarter earnings that beat analysts' estimates, though the company pulled its fiscal year 2026 outlook due to "macroeconomic uncertainty." The luxury retailer said it will not be providing a financial outlook for the fiscal year 2026 due to the uncertainty, citing "dynamic consumer spending patterns brought on by the unpredictable global trade environment." Nonetheless, Canada Goose said it "remains confident in the strength of the brand, the Company's solid financial position, and its ability to adapt to changing conditions." Here's what the company reported for the fiscal fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: Canada Goose's revenue was up 7.4% from the same period last year. Net income attributable to shareholders for the fiscal fourth quarter ending March 30 was CA$27.1 million, or 28 Canadian cents per diluted share, compared with a net income attributable to shareholders of CA$5 million, or 5 Canadian cents per diluted share in the prior year period. As of Monday's close, shares had fallen nearly 14% year to date, hitting an all-time low last month after Barclay's analysts downgraded the stock and cut their price target. The luxury sector as a whole has shown signs of weakness, with major luxury players like LVHM, Burberry and Gucci-owner Kering reporting a slowdown in sales in the quarter. Canada Goose, known for its luxury parkas and puffer jackets that can retail for over $1,000, has tried to expand into the non-winter category by offering products like rain jackets and warm-weather clothing. Its eyewear collection, introduced in the fourth quarter, was the company's first online product launch. The retailer called the launch a "key milestone" in its "product category expansion journey."
Business Mayor
16-05-2025
- Business
- Business Mayor
Cartier owner Richemont sales up 7% as jewellery shines
Representative Image Cartier owner Richemont reported a slightly better-than-expected 7 per cent rise in quarterly sales on Friday as brisk luxury jewellery business in the United States partly offset weaker demand for watches in Asia. The Swiss-based company, which also owns jewellery brand Van Cleef & Arpels and watch label Piaget, said sales in its fourth quarter to end-March rose to 5.17 billion euros (USD 5.80 billion), a 7 per cent rise in constant currencies. That is slightly more than the 6 per cent expected, according to a Visible Alpha consensus cited by HSBC, and slightly slower than the 10 per cent growth rate in the third quarter. The jewellery division posted an 11 per cent rise in sales over the quarter, mitigating a decline, also of 11%, from the watches division, whose Chinese sales have been hit as the country's property crisis shrank the appetite for luxury purchases. Luxury groups started the year with hopes that robust demand in the United States would lift the sector out of its biggest slump in years, but from mid-February, signs emerged of a weakening U.S. economy and tariff announcements in April brought more uncertainty. Richemont, which caters to extremely wealthy clientele, is viewed by analysts as more resilient to a downturn than other luxury groups that rely more on fashion sales. 'Richemont continued to gain significant market share in jewellery,' Vontobel analyst Jean-Philippe Bertschy said, noting the division accounted for 54 per cent of sales, compared to 36 per cent in 2019. Read More Bestseller India appoints Sumit Dhingra as country director Bertschy also flagged what he said was spectacular growth and profit, especially when compared with competitor LVMH , which owns jewellery labels Bulgari and Tiffany, although he said Richemont was 'not impervious' to the current volatile environment. Richemont shares are up 11 per cent since the start of the year, while shares of Hermes, which also caters to ultra wealthy shoppers, are up 14%. LVMH and Gucci-owner Kering are down 20 per cent and 25 per cent respectively. Fears of a global recession have prompted downward revisions in estimates. Consultancy Bain said on Wednesday that it had lowered its annual sales forecast for global sales of luxury goods to a likely 2 per cent to 5 per cent drop, following the sector's 1 per cent decline in 2024.
Business Recorder
16-05-2025
- Business
- Business Recorder
Cartier owner Richemont beats expectations as jewellery shines
PARIS: Cartier owner Richemont beat expectations on Friday with a 7% rise in quarterly sales as wealthy shoppers continued to splash out on jewellery, helping the group outperform rivals in the luxury downturn. Richemont, which also owns jewellery brand Van Cleef & Arpels and watchmaker Piaget, said its jewellery sales jumped 11% in its fourth quarter to the end of March, from a year earlier. That offset an 11% decline in its watches division, where Chinese sales have been hit as the country's property crisis shrank the appetite for luxury purchases. Swiss-based Richemont's total sales for the quarter amounted to 5.17 billion euros ($5.80 billion), a 7% rise in constant currencies, beating a 6% rise forecast in a Visible Alpha consensus cited by HSBC. Strong jewellery sales were 'more than enough' to offset weakness in watches, said JPMorgan, adding it showed Richemont has 'truly shifted towards the higher quality, more profitable and less cyclical part of the business.' Richemont shares rose 5% on Friday morning. The group, which caters to an extremely wealthy clientele, is viewed by analysts as more resilient to a downturn than other luxury groups that rely more on fashion sales. 'Richemont continued to gain significant market share in jewellery,' Vontobel analyst Jean-Philippe Bertschy said, noting the division accounted for 54% of sales, compared to 36% in 2019. Bertschy also flagged what he said was spectacular growth and profit, especially when compared with competitor LVMH which owns jewellery labels Bulgari and Tiffany, although he said Richemont was 'not impervious' to the current volatile environment. The logo of luxury goods company Richemont seen at its headquarters in Bellevue near Geneva Luxury groups started the year with hopes that robust demand in the United States would lift the sector out of its biggest slump in years, but from mid-February, signs emerged of a weakening U.S. economy and tariff announcements in April brought more uncertainty. Richemont shares have now gained 18% since the start of the year, while shares of Hermes which also caters to ultra wealthy shoppers, are up 14%. LVMH and Gucci-owner Kering are down 20% and 25% respectively. Price hikes Richemont executives, who were more cautious than peers in raising prices during the post-pandemic surge in demand, said they were closely watching tariffs in the United States, and will consider 'all different options' to mitigate the impact while sticking to a strategy of keeping prices globally at the same level. 'We will adjust,' Richemont Chairman Johann Rupert said in a call with journalists. Cartier, which cites exchange rate movements as a key reason for price hikes, already raised prices in March. U.S. tariffs could include a 20% charge on European fashion and 31% for Swiss-produced watches if fully applied, but in April U.S. President Donald Trump paused most of his tariffs for 90 days, setting a general 10% duty rate instead. Richemont's peer Hermes has said it is passing the full amount of tariffs to customers in the United States. Fears of a global recession have prompted downward revisions in estimates with consultancy Bain lowering its annual sales forecast for luxury goods to a likely 2% to 5% drop, following the sector's 1% decline in 2024.
