Shares slide as LVMH results disappoint

(Sharecast News) - Shares in LVMH fell sharply on Wednesday, after quarterly numbers from the French luxury goods giant underwhelmed. Fourth-quarter earnings rose 1% on an organic basis to €22.7bn, narrowly beating forecasts for €22.2bn. Annual revenues eased 1%, however, to €80.8bn.

LVMH, a bellwether for the sector, said it had shown "good resilience" despite geopolitical tensions, tariffs and weaker economic conditions.

Outside of Japan, Asia saw a "noticeable improvement in trends", it noted, including a return to growth in the second half.

Operating profits for the year were 9% lower at €17.8bn, although the fall was not as steep as some analysts had feared.

However, looking to the current year, and the owner of Christian Dior, Givenchy, Tiffany & Co, Tag Heuer and Dom Perignon, among many others, was more circumspect.

It said: "Despite a geopolitical and macroeconomic environment that remains uncertain, the group remains confident and will pursue its brand development-focused strategy, underpinned by continued innovation and investment."

Speaking when the results came out on Tuesday evening, after markets had closed, chief executive Bernard Arnault added: "I am optimistic in the medium term, but in the short term it's hard to make serious predictions."

The underwhelming numbers and lack of a bullish outlook weighed on the share price and by 0915 GMT the Paris-listed stock had shed nearly 8%.

Other luxury stocks were also tracking lower, including Hermes International, off 2%, and Kering, which slid 5%. In the UK, Burberry Group was down 2% at 1,143p, while in Switzerland Richemont was 1% weaker.