LVMH shares slide despite upbeat Q3 update

LVMH shares were lower Wednesday, despite Tuesday's upbeat Q3 earnings report, as investors are concerned that future demand from Chinese consumer could wane.

LVMH shares slide despite upbeat Q3 update

LVMH shares were lower Wednesday, just one day after reporting an upbeat third quarter financial update. While demand for items from the world’s largest luxury goods producer were robust, fears are growing that China’s appetite for such brands could diminish amid the ongoing US-China trade disagreement.

By 1200 BST, LVMH shares were 5.16% lower at €270.95. The stock has been trading broadly lower in recent weeks.

LVMH earnings details

LVMH reported that total revenues grew 10% to €33.1 billion in the first nine months of 2018, compared with a year ago. Organic revenue growth, meanwhile, was 11%, over the same period. And, in the third quarter of 2018, revenue grew 10% from a year earlier.

All sectors showed improvement from a year earlier, with an 20% increase in fashion and leather goods the stand out performer in the first nine months of the year.

“Louis Vuitton continues to be driven by the success of its iconic leather goods lines and by exceptional creativity in all its businesses,” LVMH said. “Ready-to-wear and shoes, in particular, experienced strong momentum with an excellent reception of the last two fashion shows of Womenswear and Menswear.”

Outlook

While reporting a strong Q3 performance, LVMH did allude to the ongoing trade dispute between the US and China.

“In an uncertain geopolitical and monetary context, LVMH will continue to be vigilant. The Group will pursue its strategy focused on innovation and targeted geographic expansion in the most promising markets,” LVMH said in its earnings press release.

However, while the owner of luxury brands Louis Vuitton and Dior remains cautiously upbeat, investor are less confident.

The ongoing trade disagreement between Washington and Beijing is showing no signs of coming to a quick end. That’s helped to increase concerns that Chinese consumers – the top purchasers of luxury goods – will lose their appetite and spending power to further add to their luxury collections.

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