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".



Bold Looks Among Boulders at Michael Kors’ New York Fashion Week Show 

A model walks the runway during the Michael Kors Spring/Summer 2025 fashion show during New York Fashion Week in New York on September 10, 2024. (AFP)
A model walks the runway during the Michael Kors Spring/Summer 2025 fashion show during New York Fashion Week in New York on September 10, 2024. (AFP)
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Bold Looks Among Boulders at Michael Kors’ New York Fashion Week Show 

A model walks the runway during the Michael Kors Spring/Summer 2025 fashion show during New York Fashion Week in New York on September 10, 2024. (AFP)
A model walks the runway during the Michael Kors Spring/Summer 2025 fashion show during New York Fashion Week in New York on September 10, 2024. (AFP)

Fashion sometimes involves risk and designer Michael Kors would tell you some risks aren’t worth taking. Last year, his September show was held outside and the weather did not cooperate, so he decided his spring/summer 2025 collection at New York Fashion Week would bring nature inside instead.

Kors and his team created a unique runway in a cavernous raw space in a midtown building, with stark metal benches lining the rectangular walls and gigantic faux black rocks scattered in the center and sides, similar to the rocky beaches of the Amalfi Coast. The drama of Italian cliffs in an urban setting was part of Kors’ abstract inspiration.

Kors says he’s “glued” to pop culture and was especially fascinated by the recent Netflix series “Ripley,” based on Patricia Highsmith’s classic novel, “The Talented Mr. Ripley.” The dark story is set in coastal Italy where a man who covets a friend’s wealthy life kills him and takes over his identity, killing anyone else who threatens his new persona.

“Seeing this romantic, moody, dark story shot all in black and white, I thought it brought something very different to the romance of it,” Kors told The Associated Press backstage before the show. “There was this sort of dark side of romance that’s not sweet, not insipid, and mysterious. And then also, this is my 35th anniversary of working with Italian artisans and I really wanted to play up all of the incredible tailors and craftspeople in Italy.”

The result was a show that used stark lighting and a haunting instrumental score to set the mood for a lot of black and white and muted colors with looks that evoke Ripley’s 1950’s hybrid style of city and resortwear.

“There’s lots of texture, black raffia, white embroideries. Everything is very tactile,” Kors explained. “It’s all the colors that you would find in the Mediterranean. So all of the natural colors have very soft browns and creams. And then of course, there’s going to be blue.”

The brand’s craftsmanship was on display with intricate peekaboo lace dresses and skirts and several dresses, skirts and coats adorned with flower applique’. Accessories stood out in the collection with leather handbags, hats and shoes teeming with black raffia that looked like leather straw. Nearly every look had a belt — some styled loosely but extra-long and knotted to dangle, and others wide and tight at the waist. The ever-present trench coat appeared for men and women on the runway, mostly oversized and slouchy.

This season’s shows brought guests and media to all corners of the city and surroundings, showing off its beauty and designers’ creativity — from a horse ranch in the tony Hamptons for Ralph Lauren, to a giant ferry boat docked on the East River for Tommy Hilfiger, to an old Domino sugar factory in Brooklyn for Tory Burch.

The show’s front row was packed with celebrities, including Kerry Washington, Mary J. Blige, Shailene Woodley, Mindy Kaling, and Lindsay Lohan.

“I’m always really inspired by the simplicity, the craftsmanship. He has a real kind of a love for women that is so kind of understated, but just so consistent,” Olivia Wilde said. “I always feel so beautiful in his clothes.”

Suki Waterhouse was wearing a pink lace Kors dress and matching fluffy coat. “The straw shoes with the matching bag was my absolute favorite,” the actor and recording artist said after the show. “I need to book a holiday to be able to wear those things.”