Shares of French luxury products company LVMH Moët Hennessy Louis Vuitton, or LVMH (FR:MC) fell over 4% as of writing after the company’s Q2 sales of €20.98 billion missed analysts’ consensus estimate of €21.6 billion. The company’s quarterly sales marked a 1% year-on-year increase on an organic basis. However, it fell behind the 3% year-on-year rise in the first quarter and double-digit growth in 2023, when consumers in China indulged in luxury goods following the lifting of pandemic restrictions.
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LVMH’s Q2 results also impacted other luxury stocks, further highlighting the ongoing troubles in the industry. French luxury brands Hermès International (FR:RMS) lost 1.10%, while Kerring (FR:KER) has declined over 3% as of writing.
LVMH is a European conglomerate known for popular luxury brands, including Dior, Louis Vuitton, Sephora, Fendi, and Bulgari.
Highlights from LVMH’s First-Half Performance
Regionally, LVMH’s sales in Asia, including its key market China but excluding Japan, declined by 14% in the second quarter. This marked a steeper drop compared to the 6% decline seen in the first quarter. On the other hand, the company’s sales in Japan increased, driven by an influx of Chinese travellers.
Among its segments, sales in its Fashion and Leather Goods division, which is its largest by revenue and profit, grew only 1% organically in the first half. The division’s operating profits dropped by 6%.
Overall, LVMH’s net profit fell by 14% year-over-year to €7.3 billion in the first half of 2024. Meanwhile, profit from recurring operations for the first half of 2024 reached €10.7 billion, down from €11.57 billion a year ago.
What is the Future Price of LVMH Stock?
Following the results, analysts maintained their ratings on the MC stock, including three Buy recommendations. Among these, analyst Louise Singlehurst predicts 42.3% upside potential in the share price.
Overall, MC stock has received a Moderate Buy rating on TipRanks, backed by a total of 11 recommendations from analysts. It includes six Buy and five Hold ratings. The LVMH share price target is €866.50, which is 31.3% higher than the current trading level.
