World’s Biggest Luxury Brand Still Struggles As China Troubles Loom Large - Report

LVMH (LVMUY), the world's biggest luxury brand, has reportedly told investors and analysts that weakness in the business is persisting and its China market continues to underperform, signaling a bleak picture for the luxury retail industry worldwide.

According to a Bloomberg News report, the French conglomerate is sending cautious signals about second-quarter trends amid lackluster consumer confidence, particularly in China.

Sources told the publication that LVMH indicated its current quarter might not improve over the previous one. 

LVMH, which owns Louis Vuitton, Dior, and Tiffany and towers with over $90 billion in annual revenue, missed sales expectations last quarter.

LVMH’s revenue in the region, including China, fell 11% organically and recorded a similar drop for 2024. The area that includes China accounts for 30% of LVMH’s total sales, while the U.S. garners 24%, according to the report.

China has long been a key growth driver for luxury retailers, but ongoing economic weakness and fresh uncertainty from U.S. tariffs are prompting consumers to pull back on spending.

Already facing press from weak consumer trends, LVMH's pessimistic outlook might further weigh on the sentiment for luxury retailers, from U.S. firms Tapestry (TPR), Capri Holdings (CPRI), and Ralph Lauren (RL) to European giants like Kering, Richemont, and Gucci.

Capri recently sold its Versace to Prada for $1.4 billion. Meanwhile, investors might find more clues in Ralph Lauren's quarterly report, due on Thursday.

On Stocktwits, the retail sentiment for LVMUY dropped to 'neutral' from 'bullish.' As of writing, the sentiment was 'neutral' for Tapestry, and 'bullish' for Capri and Ralph Lauren.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on