LVMH said to warn of continued luxury weakness amid China woes

LVMH is said to be warning investors and analysts that demand trends in the current quarter remain soft after the luxury conglomerate missed revenue estimates for the first three months of the year. With a view to manage expectations, LVMH Moët Hennessy Louis Vuitton is putting out cautious signals on second-quarter trends amid lackluster consumer confidence, particularly in China, according to people familiar with the matter who declined to be identified discussing information that’s not public. Some of the people suggested the company’s current quarter may show no improvement over the previous one. China luxury market softens, dragging global performance The luxury market is struggling to emerge from a period of sluggishness caused in part by shoppers reining in costly purchases in China, which has been a crucial growth engine for industry majors from LVMH and Chanel to Hermès and Richemont. The industry’s outlook has grown even gloomier since U.S. President Donald Trump last month began to impose tariffs on imports across industries and countries. It is common for listed companies like LVMH to brief investors and analysts in conferences, meetings or calls about their business trends after publishing results. LVMH posted its first quarter sales results on April 14. The company didn’t immediately have a comment. In the first quarter, LVMH’s revenue in the region that includes China fell 11% on an organic basis and recorded a similar drop for all of 2024. Preliminary analyst estimates show sales for Asia-Pacific excluding Japan in the second quarter may slide by 6.4%, while the key fashion and leather goods unit, which includes Louis Vuitton and Christian Dior, may see revenue fall 3.7%, according to data compiled by Bloomberg. This division generates the bulk of LVMH’s profitability. The region that includes China accounts for 30% of LVMH’s total sales, while the U.S. garners 24%. Investor sentiment weakens as tariffs bite Shares of the French group have dropped by about 22% so far this year amid demand worries in China as well as concerns that Trump’s tariffs will weigh on consumer spending in the U.S. Competitors such as Hermes International and Cartier owner Richemont, that have been a bit more resilient, have seen their shares rise over the same period, while Gucci-owner Kering has tumbled 24%. Out of nearly 40 analysts tracked by Bloomberg who cover LVMH, only one has a sell recommendation. By Angelina Rascouet and Julien Ponthus

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LVMH said to warn of continued luxury weakness amid China woes