PARIS (dpa-AFX) - LVMH shares tumbled 7.8 percent on Tuesday after the company reported a surprise drop in first-quarter sales, surrendering its long-held title as the world's most valuable luxury brand to rival Hermès. The French luxury giant posted a 3 percent year-on-year decline in organic revenue, falling short of analysts' expectations for modest growth.
The disappointing update triggered a broader sell-off across luxury stocks. Kering dropped 5.2 percent, Burberry slid 4.6 percent, and Richemont slipped 0.9 percent. LVMH, known for brands like Louis Vuitton, Dom Pérignon, and Tiffany & Co., saw its market capitalization fall to 244.1 billion euros, while Hermès edged ahead with a valuation of 246.4 billion euros.
LVMH's first-quarter results reflected widespread softness across key divisions. Wines and spirits revenue plunged 9 percent amid weakening demand in the U.S. and China, while the crucial fashion and leather goods segment declined 5 percent. Watches and jewelry remained flat, and both perfumes and cosmetics and selective retailing dropped 1 percent. Europe was the only region to post growth, up 2 percent, while Asia, excluding Japan saw sales plunge 11 percent.
Citi analysts said the results were 'below even the most cautious expectations,' citing a lack of near-term catalysts amid macroeconomic headwinds and heightened geopolitical uncertainty. Bank of America echoed those concerns, warning that trade tensions and tariff volatility could weigh further on demand in critical markets.
Despite the setback, LVMH said it remains 'vigilant and confident' as it navigates a disrupted global landscape. However, with its market value down more than 45 percent from its 2023 peak, the path to recovery may be anything but smooth.
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