Latest news with #JelenaSokolova
Fashion Network
22-05-2025
- Business
- Fashion Network
LVMH loses spot among Europe's top five stocks amid market slump
LVMH has lost its position among Europe's five largest listed companies as the luxury group endures its steepest year-to-date stock decline since the 2008 financial crisis. Shares of the French company dropped roughly 3% on Thursday, extending its 2024 losses to 25%. With a market capitalization of about €239 billion ($270 billion), LVMH now trails Swiss packaged-foods maker Nestlé SA in value. Like many luxury players, LVMH is facing pressure from weakening demand in China and growing concerns that potential tariffs under a new Donald Trump administration could curb consumer spending in the U.S. According to sources familiar with the matter, the company has issued cautious signals about second-quarter performance. 'For shares to reprice, we'd need to return to some growth in the industry and/or some relative outperformance versus peers,' said Morningstar analyst Jelena Sokolova. 'I think both are more likely than not over the medium term, but I'm not sure those will happen this year.' The downturn marks a notable reversal for a stock that ranked among the world's top 10 as recently as 2023, even rivaling Meta Platforms Inc. in market value. Investor confidence has waned as signs of recovery remain elusive. Barclays Plc analyst Carole Madjo recently downgraded LVMH to 'equal weight,' citing limited expectations for a rebound in the company's core fashion and leather goods division this year. 'Given the incremental headwinds facing the sector, particularly in the U.S., we believe the sector's earnings recovery story may be delayed,' Madjo wrote in a note.
Business of Fashion
22-05-2025
- Business
- Business of Fashion
LVMH Relinquishes Place Among Europe's Top Five Biggest Stocks
LVMH lost its place among Europe's top five listed companies as the luxury-goods maker endures its worst year-to-date slide since the 2008 financial crisis. The French company's shares fell about 3 percent on Thursday, taking their decline for this year to 25 percent. Its market value of about €239 billion ($270 billion) slipped below that of Swiss packaged-foods maker Nestle SA. Like most luxury companies, LVMH is being weighed down by demand worries in China and concerns that Donald Trump's tariffs will weigh on consumer spending in the US. The company has been putting out cautious signals on second-quarter trends, according to people familiar with the matter. 'For shares to reprice we'd need to return to some growth in the industry and/or some relative outperformance versus peers,' Morningstar analyst Jelena Sokolova said. 'I think both are more likely than not over the medium-term but I'm not sure those will happen this year.' ADVERTISEMENT It's been a gradual retreat for a stock that claimed a spot in the world's top 10 as recently as 2023, and once rivalled Facebook-owner Meta Platforms Inc. in terms of size. Investors fret that a recovery is looking elusive. Barclays Plc analyst Carole Madjo recently downgraded LVMH to equal-weight, saying she doesn't expect the firm's key fashion and leather-goods division to return to growth this year. 'On the back of the incremental headwinds facing the sector, especially in the US, we think the sector's earnings recovery story could be delayed,' Madjo said in a note. By Kit Rees and Julien Ponthus Learn more: LVMH Said to Signal Continued Weakness on China Woes The French luxury behemoth is warning investors and analysts that demand remains soft this quarter amid lacklustre consumer confidence, particularly in China, sources told Bloomberg.
Fashion Network
22-05-2025
- Business
- Fashion Network
LVMH loses spot among Europe's top five stocks amid market slump
LVMH has lost its position among Europe's five largest listed companies as the luxury group endures its steepest year-to-date stock decline since the 2008 financial crisis. Shares of the French company dropped roughly 3% on Thursday, extending its 2024 losses to 25%. With a market capitalisation of about €239 billion ($270 billion), LVMH now trails Swiss packaged-foods maker Nestlé SA in value. Like many luxury players, LVMH is facing pressure from weakening demand in China and growing concerns that potential tariffs under a new Donald Trump administration could curb consumer spending in the U.S. According to sources familiar with the matter, the company has issued cautious signals about second-quarter performance. 'For shares to reprice, we'd need to return to some growth in the industry and/or some relative outperformance versus peers,' said Morningstar analyst Jelena Sokolova. 'I think both are more likely than not over the medium term, but I'm not sure those will happen this year.' The downturn marks a notable reversal for a stock that ranked among the world's top 10 as recently as 2023, even rivalling Meta Platforms Inc. in market value. Investor confidence has waned as signs of recovery remain elusive. Barclays Plc analyst Carole Madjo recently downgraded LVMH to 'equal weight,' citing limited expectations for a rebound in the company's core fashion and leather goods division this year. 'Given the incremental headwinds facing the sector, particularly in the U.S., we believe the sector's earnings recovery story may be delayed,' Madjo wrote in a note.
Fashion Network
22-05-2025
- Business
- Fashion Network
LVMH loses spot among Europe's top five stocks amid market slump
LVMH has lost its position among Europe's five largest listed companies as the luxury group endures its steepest year-to-date stock decline since the 2008 financial crisis. Shares of the French company dropped roughly 3% on Thursday, extending its 2024 losses to 25%. With a market capitalization of about €239 billion ($270 billion), LVMH now trails Swiss packaged-foods maker Nestlé SA in value. Like many luxury players, LVMH is facing pressure from weakening demand in China and growing concerns that potential tariffs under a new Donald Trump administration could curb consumer spending in the U.S. According to sources familiar with the matter, the company has issued cautious signals about second-quarter performance. 'For shares to reprice, we'd need to return to some growth in the industry and/or some relative outperformance versus peers,' said Morningstar analyst Jelena Sokolova. 'I think both are more likely than not over the medium term, but I'm not sure those will happen this year.' The downturn marks a notable reversal for a stock that ranked among the world's top 10 as recently as 2023, even rivaling Meta Platforms Inc. in market value. Investor confidence has waned as signs of recovery remain elusive. Barclays Plc analyst Carole Madjo recently downgraded LVMH to 'equal weight,' citing limited expectations for a rebound in the company's core fashion and leather goods division this year. 'Given the incremental headwinds facing the sector, particularly in the U.S., we believe the sector's earnings recovery story may be delayed,' Madjo wrote in a note.
CNBC
24-04-2025
- Business
- CNBC
Why investors are turning cold on Gucci's long-awaited turnaround strategy
Investors are growing skeptical of a long-awaited turnaround at luxury house Gucci after sales slipped again in the first quarter. Sales at Kering -owned Gucci, which make up nearly half of total group revenues, fell 25% year-on-year on a comparable basis to 1.57 billion euros ($1.79 billion) in the first three months of the year, the company reported Wednesday. The sales slump has left analysts unconvinced about management's ability to revitalize its once darling brand. "The lack of signs of any positive inflection at Gucci ... make us think that the turnaround will take much longer than hoped and that profitability, cash generation and balance sheet will continue to materially suffer in the process," JPMorgan said in a note Thursday. It comes amid broader sales softness at the French luxury group. Revenues at Yves Saint Laurent (YSL) were down 9% on a comparable basis in the first quarter, while those at Bottega Veneta — until now Kering's bright spot — normalized to single-digit growth of 4%. The stock closed down 0.97% on Thursday following the earnings release, with individual shares trading around 173 euros. JPMorgan said it now expects an "equally weak" second quarter for the group and a slower recovery in the second half of the year. The Wall Street bank lowered its 12-month price target for Kering from 195 euros to 150 euros, while TD Cowen reduced its target to 175 euros from 260 euros. "We are cautious on risk for continued declines at Gucci and YSL, which could drive further earnings pressure combined with lack of clear path to improvement in APAC," TD Cowen wrote Thursday. The luxury sector has been undergoing a period of extended weakness, particularly within the key Chinese market. A broadly positive fourth-quarter earnings season had pointed to nascent signs of a recovery, but recent tariff-induced economic headwinds are likely to prove a further headache for the sector, particularly for struggling brands like Gucci. "Since Gucci is no longer top of the mind for consumers and budgets are constrained, demand suffers," Jelena Sokolova, senior equity analyst and luxury good expert at Morningstar, said in a note Thursday. Gucci's overhaul Gucci, once the jewel in Kering's crown, has fallen out of favor with consumers over recent years following a series of missteps in its management and artistic direction. Kering has sought to address these challenges through changes to its carryover lines, the speed of supply to new markets, and the appointment in March of Demna Gvasalia as its new artistic director. Nevertheless, analysts remain cautious about the brand's new direction under the controversial designer , whose flagship line is set to hit the catwalk in September. "There is growing concern around Gucci's brand identity. Without a clear direction or unified creative vision, the brand risks sending mixed signals to consumers. Leadership changes and inconsistent strategies have created uncertainty, and this lack of clarity could continue to weigh on both brand perception and financial performance," Yanmei Tang, analyst at Third Bridge, wrote in a note Wednesday. Kering is now among Europe's most unloved major luxury stocks, with shares currently down 27% year-to-date. Still, Morningstar's Sokolova said Thursday that suggestions of a permanent lag in the share price may be overdone. "Although the timing of Gucci turnaround is highly uncertain (and aggravated by tough macro landscape), we still think it's highly unlikely that the brand would continue to permanently lag the sector (which shares are pricing in at the moment) given its global recognition, pricing power and control over distribution and limited competition in its price ranges," Sokolova wrote. A Gucci store, operated by Kering SA, in the Sanlitun area of Beijing, China, on Saturday, Oct. 12, 2024.
