LVMH Shares Drop after Missing Second-quarter Estimates

A man walks past a shop of fashion house Dior in Paris, France, April 15, 2024. REUTERS/Manon Cruz/File Photo Purchase Licensing Rights
A man walks past a shop of fashion house Dior in Paris, France, April 15, 2024. REUTERS/Manon Cruz/File Photo Purchase Licensing Rights
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LVMH Shares Drop after Missing Second-quarter Estimates

A man walks past a shop of fashion house Dior in Paris, France, April 15, 2024. REUTERS/Manon Cruz/File Photo Purchase Licensing Rights
A man walks past a shop of fashion house Dior in Paris, France, April 15, 2024. REUTERS/Manon Cruz/File Photo Purchase Licensing Rights

Shares in LVMH (LVMH.PA) fell as much as 6.5% in early Wednesday trade and were on track for their biggest one-day drop since October 2023 after second-quarter sales growth at the French luxury goods giant missed analysts' consensus estimate.

The world's biggest luxury group said late Tuesday its quarterly sales rose 1% year on year to 20.98 billion euros ($22.76 billion), undershooting the 21.6 billion expected on average by analysts polled by LSEG.

At 1000 GMT, LVMH's shares were down 4.5%.

The earnings miss weighed on other luxury stocks, with Hermes (HRMS.PA), down around 2% and Kering (PRTP.PA), off 3%.

Kering is scheduled to report second-quarter sales after the market close and Hermes reports on Thursday, Reuters reported.

Jittery investors are looking for evidence that the industry will pick up from a recent slowdown, as inflation-hit shoppers hold off from splashing out on designer fashion.

JPMorgan analyst Chiara Battistini cut full year profit forecasts by 2-3% for the group, citing softer trends at LVMH's fashion and leather goods division, home to Louis Vuitton and Dior.

"The soft print is likely to add to ongoing investors’ concerns on the sector more broadly in our view, confirming that even best-in-class players like LVMH cannot be immune from the challenging backdrop," said Battistini in a note to clients.

The weakness of the yen, which has prompted a flood of Chinese shoppers to Japan seeking bargains on luxury goods, added pressure to margins, another source of concern.

Equita cut 2024 sales estimates for LVMH by 3% - attributing 1% to currency fluctuations - and lowered its second half organic sales estimate to 7% growth from 10% growth previously.

The lack of visibility for the second half beyond the easing of comparative figures - as the Chinese post-pandemic lockdown bounce tapered off a year ago - is unlikely to improve investor sentiment to the luxury sector, Citi analyst Thomas Chauvet said in an email to clients.

"No miracle with the luxury bellwether; sector likely to remain out of favour," he wrote.

Jefferies analysts said the miss came as investors eye Chinese shoppers for their potential to "resume their pre-COVID role as the locomotive of industry growth and debate when Western consumers will have fully digested their COVID overspend".

LVMH shares have been volatile since the luxury slowdown emerged, and are down about 20% over the past year, with middle-class shoppers in China, the world's No. 2 economy, a key focus as they rein in purchases at home amid a property slump and job insecurity.

LVMH offered some reassurance, with finance chief Jean-Jacques Guiony telling analysts during a call on Tuesday that Chinese customers were "holding up quite well," while business with US and European customers was "slightly better".



Michael Kors Takes It Easy with New Collection at New York Fashion Week 

Models walk the runway during the Michael Kors Fall/Winter 2025 show during New York Fashion Week in New York City on February 11, 2025. (AFP)
Models walk the runway during the Michael Kors Fall/Winter 2025 show during New York Fashion Week in New York City on February 11, 2025. (AFP)
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Michael Kors Takes It Easy with New Collection at New York Fashion Week 

Models walk the runway during the Michael Kors Fall/Winter 2025 show during New York Fashion Week in New York City on February 11, 2025. (AFP)
Models walk the runway during the Michael Kors Fall/Winter 2025 show during New York Fashion Week in New York City on February 11, 2025. (AFP)

Michael Kors created a runway that evoked his own living room to set the tone for his new Fall/Winter collection for New York Fashion Week, which focused on comfort and movement.

"It’s about the idea of ease, which we Americans invented. The world dresses this way, but what I like is that it has glamour," Kors told The Associated Press backstage before the show.

The designer says he looked at old photos of icons like Lauren Hutton back in the 70s, and Zoe Kravitz on the street today to find the essence of the collection. "There’s this relaxed ease to how they look that I think is modern," Kors said.

"It’s also about layering things in a very cool way. So it could be... a silk dress, but grab your husband’s coat or his jacket and throw it on. It’s about stride. I like when clothes move when you walk."

Models let the clothes do the talking with very minimal makeup and loose, natural hair as they marched down an extended two-aisled runway. The show opened with softly tailored menswear jackets paired with long flowing skirts or slouchy suit pants.

For a modern twist on layering for the fall, the show featured bikini bra tops under oversized blazers — either alone or with long blouses layering in between.

"Delicious oversized, cardigan blazers and coats with these very sort of filmy, soft dresses. This show is anti-corset, anti-Spanx, anti-bustier. It’s that comfort and ease," Kors said.

Kors also heightened the show with touches of glamour in elegant dresses and jackets with swaths of sparkling sequins.

Black was a dominant color, with some grey, grey tweed and a few neutral colors including chocolate, green and deep purple. One standout material was long haired shearling-- in surprising colors like dusty mauve and celadon-- shown on a peacoat, a vest, several purses and even a pair of flat shoes.

Kors has always said every woman needs a great coat and he had plenty of options from leather trench coats belted tightly at the waist, to leather hipster jackets in several shapes, to one traditional trench-style, covered in liquid sequins which glistened in the light. There were cozy looks too, like long thick turtleneck sweaters – part of Kors' "neo-classic knitwear."

Extending the casual, comfortable style to the setting, Kors and his team transformed a giant, high-ceilinged space at New York’s Terminal Warehouse to look like his home, with exposed brick and wood accents, and even art and houseware pieces punctuating the end of each runway bench. Japanese paper lanterns hung from the vaulted ceilings adding to what Kors called his "warm modernism."

Celebrities flock to Kors shows and despite frigid New York temperatures, stars including Uma Thurman, Kerry Washington, Suki Waterhouse, Rose Byrne, Lea Michele, Cristin Milioti, and Rachel Zegler huddled together in the front row. Actor and reality star Lisa Rinna brought her daughter, Delilah Belle Hamlin, to watch her other daughter, Amelia Gray Hamlin, walk the runway.

"I can’t stop singing my praises about it," gushed actor-singer Suki Waterhouse, who called the show "absolutely stunning."

"Those drama-crazy hats, scarves that look like blankets. It was everything it needed to be."

Byrne said the clothes were "gorgeous" and so wearable. "(I’m) obsessed with the oversized suits already. The classic big coats, the beautiful chic dresses. Classic Michael Kors, he always delivers."