Weaker results surprised analysts previously predicting only a slight reduction at 0.55 percent. Regions have suffered the most, in which there was usually a particularly large interest in luxury goods. This indicates a change in moods and limiting expenditure on high -end articles.
The reduction of demand in China and the United States is clear, where there is uncertainty related to the possibility of tightening the trade war.
According to the published report, LVMH sales in the American segment decreased by 3 percent. Even bigger, because 11 % inheritance, recorded in China. In these markets, the introduction of duties on European products becomes a problem, which raises their final prices and limits the desire to reach for luxury goods by consumers.
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Looking for ways to alleviate the effects of duties, LVMH is considering the possibility of increasing prices or changing expenses for marketing activitieshowever, it is possible that this will not prevent further drop in demand if consumer moods do not improve.
LVMH must deal with worse sales
Unlike China and the United States, Europe has recorded a slight increase in sales, but it is not significant enough to compensate for global losses. The exception compared to the other segments turned out to be watches and jewelry, whose sales remained at a similar level as before, while the guilt and spirit products department suffered the most, falling by 9 percent.
It is partly The effect of imposing higher duties by China on Henness cognacwhich further deepens the adverse trend.
The current situation makes investors less optimistic as to the rapid improvement of the economic situation in the luxury goods sector, and The value of LVMH has recently experienced significant declines.
The market is anxiously waiting for the results of more companies in the industry, such as Moncler or Hermès, to verify whether the lower demand for expensive products will remain a long -term tendency or whether it is temporary.
Meanwhile, LVMH management, heading a group offering such brands as Louis Vuitton, Tiffany and Dom Perignon, He must face the pressure of maintaining his position with limited customer interest and a vague perspective of stabilization in international trade.
LVMH shares have fallen from January by 16.50 percent.
