LVMH falls almost 7% on the Paris Stock Exchange the day after its results

LVMH is growing slightly less than expected. The stock of the world's number one luxury retailer fell by more than 6% on Wednesday on the Paris Stock Exchange, after announcing a "return to normal" for customers which led to a slowdown in the growth of its sales.

The stock fell by 6.67% to 684.60 euros around 10:20 a.m., on the way to its worst session since March 2020. This drop weighed down the CAC 40 (-0.89%), very sensitive to luxury values. LVMH is valued almost 25 billion euros less by the market compared to Tuesday. Its market capitalization, that is to say the sum that would have to be paid to buy all the shares, is now around 343 billion euros. Bernard Arnault's group announced that it had achieved a turnover of 19.96 billion euros in the third quarter, an increase of 1% over one year. This figure is lower than expected.

“The key Fashion sector

The group briefly entered the circle of the 10 largest market capitalizations in the world, and was the first European company to exceed 400 billion euros in valuation, before reaching a peak at 452 billion euros. LVMH shares peaked at more than 900 euros in April, and approached this level again in mid-July. Currently the share price is at its lowest since the last days of 2022 and LVMH has left the list of the 20 largest capitalizations in the world. At the beginning of September, LVMH also ceded its throne as the largest European company to the Danish laboratory Novo Nordisk, which attracted investors with the exceptional growth in sales of treatments against obesity.

But signs of normalization of activity in the luxury sector have deflated the share price, which has lost 23% in three months. Chinese customers "are not necessarily ready to support growth as they have done in the past", estimates a note from the financial group Hargreaves Lansdown, for which growth in China is slower than expected and the recovery of The activity after the pandemic has not taken off as hoped. “European and American consumers are also normalizing their spending,” points out Hargreaves Lansdown. LVMH is usually the first luxury company to publish its financial results. In France, the other big names in the sector will only reveal their performances at the end of October.

Tuesday's publication “risks increasing pressure on the luxury sector as a whole in the short term,” describe RBC analysts. In France, Hermès fell by 2.57% and Kering by 2.61%. Both are due to announce their results on October 24. In Europe, Burberry fell by 3.51%, Moncler by 2.62%, Richemont by 3.82%, Swatch Group by 1.71%.