Shares in LVMH fell sharply on Wednesday as analysts said that an in-line increase in sales at the world's top luxury indicated the overall sector was moving towards a less impressive path of growth.
"While this is a solid growth rate in absolute terms...whether we are now at the end of the positive earnings revision cycle for luxury and on the drivers of sector growth going forward" wrote analysts at JP Morgan.
LVMH shares were down 3.7% in early session trading, also dragging down the shares of its rival Kering.
The French company, whose 75 brands include fashion labels Louis Vuitton and Dior as well as Hennessy cognac and US jeweller Tiffany, said on Tuesday it made 21.2 billion euros ($23.4 billion) of sales in the three months to the end of June.
The 17% increase at constant exchange rates was a touch better than analyst expectations for 16% growth. LVMH's leather goods division, home to Vuitton and Dior, grew revenues by 21%, also just above the expected 20% increase.
The narrow beat for a company that had routinely delivered results ahead of expectations, and is regarded as a bellwether for the luxury industry, flagged the "normalization" of the sector after years of stellar growth driven by post-pandemic euphoria, Luca Solca at Bernstein said.
LVMH also reported a 1% fall in US sales as appetite for high-end fashion and leather goods slowed there, particularly among less wealthy shoppers, and lower-than-expected margins due to high marketing spending.
