Investors in LVMH, the world’s largest luxury goods giant, are pinning their hopes on China’s economic stimulus policies. The group is set to release its third-quarter performance data after markets close on Tuesday. According to Bain & Company, global personal luxury goods sales are expected to grow by 4% this year, flat compared to last year. LVMH’s fashion and leather goods business is the main driver of investor sentiment in the luxury sector. Based on estimates from 15 analysts compiled by Visible Alpha, LVMH’s third-quarter revenue is projected to reach 20.01 billion euros, up from 19.96 billion euros in the same period last year. According to the same consensus, analysts expect LVMH to achieve organic revenue growth of 1.4%.

Bank of America analysts believe the third quarter will be the worst-performing quarter for the luxury goods industry in nearly four years. Meanwhile, Jefferies analysts predict that demand for luxury goods from Chinese consumers will see healthy growth in 2025.

According to data from Business of Fashion Daily, LVMH’s first-half sales fell 1% to 41.7 billion euros, with organic growth of 2%, falling short of the widely expected 42.2 billion euros. Operating profit plunged 8% to 10.7 billion euros, while net profit dropped 14% to 7.3 billion euros. In the second quarter, total revenue grew organically by 1% to 21 billion euros, also missing market expectations of 21.4 billion euros. As of the market close on the 14th, LVMH’s stock price fell 2.6% to 636 euros, down about 4% over the past 12 months, with a current market cap of approximately 319.8 billion euros.

Source: Business of Fashion Daily, October 15, 2024