LVMH Moet Hennessy Louis Vuitton SE’s sales of fashion and leather goods declined in the fourth quarter of last year, casting doubt on the prospects for a quick recovery in luxury demand.
Sales at the key unit, which includes the Louis Vuitton and Christian Dior brands, slipped 1 percent on an organic basis as wealthy holiday shoppers remained cautious.
Overall revenue at LVMH increased only 1 percent from a year earlier.
Photo: AFP
Both figures were slightly better than estimates, but disappointed investors after an upbeat report from rival Richemont earlier this month.
LVMH shares fell as much as 5.5 percent in Paris early yesterday, after rallying more than 30 percent from their low in November last year.
LVMH’s update raised concerns that the industry’s recovery from last year’s slump — caused in part by Chinese shoppers reining in high-end purchases after years of splashing out — might be slow and uneven.
Sales in the region that includes China dropped 10 percent year-on-year in the fourth quarter, the only geographic area that did not show growth.
“What I expect is to see a gradual recovery,” LVMH chief executive officer Bernard Arnault said of China during a presentation on Tuesday.
“The environment was severely impacted by COVID, then there was a strong recovery, followed by another crisis — the real-estate crisis — so it’s going to take some time,” Arnault added.
Overall, the situation globally was better in the period, but the improving trend still needs to be confirmed, LVMH chief financial officer Jean-Jacques Guiony said.
Profit at LVMH disappointed, even as the company lowered its overall marketing costs by 5 percent last year.
Recurring operating income dropped 14 percent last year to 19.6 billion euros (US$20.4 billion), missing estimates. One-time costs had an impact, including charges related to the Paris Olympic Games, Guiony said.
Still, there were signs of resilience at the luxury group. Sales at the watches and jewelry unit, which includes Tiffany and Bulgari, unexpectedly rose in the fourth quarter, more evidence that wealthy shoppers are favoring so-called hard luxury items, rather than the soft luxury of handbags and evening wear. Tiffany sales rose 9 percent year-on-year in the period.
Arnault struck an upbeat tone at the presentation.
He said this year has started relatively well, with Louis Vuitton posting double-digit growth so far this year.
Arnault also said he is confident that struggling brand Dior will make progress this year, and predicted a “booming” US market, a country he visited last week for US President Donald Trump’s inauguration.
The wine and spirits business, which has been in a slump following a pandemic-era surge, could recover in the next two years, he said. A sale of the Moet Hennessy drinks unit is not on the agenda, he added.
When an apartment comes up for rent in Germany’s big cities, hundreds of prospective tenants often queue down the street to view it, but the acute shortage of affordable housing is getting scant attention ahead of today’s snap general election. “Housing is one of the main problems for people, but nobody talks about it, nobody takes it seriously,” said Andreas Ibel, president of Build Europe, an association representing housing developers. Migration and the sluggish economy top the list of voters’ concerns, but analysts say housing policy fails to break through as returns on investment take time to register, making the
EARLY TALKS: Measures under consideration include convincing allies to match US curbs, further restricting exports of AI chips or GPUs, and blocking Chinese investments US President Donald Trump’s administration is sketching out tougher versions of US semiconductor curbs and pressuring key allies to escalate their restrictions on China’s chip industry, an early indication the new US president plans to expand efforts that began under former US president Joe Biden to limit Beijing’s technological prowess. Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron Ltd and ASML Holding NV engineers from maintaining semiconductor gear in China, people familiar with the matter said. The aim, which was also a priority for Biden, is to see key allies match China curbs the US
NOT TO WORRY: Some people are concerned funds might continue moving out of the country, but the central bank said financial account outflows are not unusual in Taiwan Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other major manufacturers to boost global expansion, the central bank said on Thursday. The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed. Chen Fei-wen (陳斐紋), deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan. Investments by Vanguard International
Berkshire Hathaway Inc is looking to increase ownership in Japan’s five largest trading houses “over time,” company chairman and CEO Warren Buffett said in an annual letter to shareholders. The conglomerate had originally agreed to keep its holdings in the companies below 10 percent. However, the trading houses have agreed to relax the ceiling “moderately,” as Berkshire approaches the limit, a letter dated on Saturday said. The shares of the five — Mitsubishi Corp, Mitsui & Co, Itochu Corp, Sumitomo Corp and Marubeni Corp — have benefited over the longer-term from Buffett’s interest. However, they have struggled in recent months, along with