All articles tagged with #luxury sector
Kering, the owner of luxury fashion brand Gucci, has issued a rare profit warning for the luxury sector, citing concerns about the impact of the ongoing COVID-19 pandemic. The company's warning reflects broader challenges facing the fashion industry as consumer behavior continues to be affected by the global health crisis.
LVMH's strong Q4 sales figures reassured investors about the luxury sector's resilience, prompting a $70 billion buying spree in luxury shares and adding about $30 billion to LVMH's market value. The surge in share prices also lifted the pan-European STOXX 600 index to a 2-year high. Chinese demand for European fashion brands remains a key concern, but LVMH's latest report and comments from executives have helped steady nerves in the near term. The luxury goods industry is expected to face diverging fortunes among brands, with those catering to wealthier clients better equipped to face economic challenges.
LVMH shares surged over 8% after reporting higher-than-expected sales for 2023 and raising its annual dividend, with sales reaching 86.15 billion euros and organic growth at 13%. The fashion and leather goods sector saw a 14% annual growth, while perfumes and cosmetics grew by 11%, offsetting a 4% decline in wines and spirits.
Porsche and Tesla have both issued warnings about the impact of high interest rates on their businesses. Porsche's CFO, Lutz Meschke, stated that inflation and high rates were a concern, leading to customer reluctance to invest in new products. Tesla CEO Elon Musk also expressed concerns about high rates, emphasizing that they reduce affordability and make it harder for people to buy cars. Both companies highlighted China as a region of concern, with Porsche expecting a challenging year in 2024 due to the geopolitical situation and the economy. Despite these warnings, Porsche confirmed its forecast for the current financial year, citing strong sales and positive product mix as contributing factors.
Shares of LVMH, the world's largest luxury firm, fell to their lowest level of the year after reporting a slowdown in revenue growth that was below expectations. The company's quarterly revenue growth of 9% year-on-year was a sharp decline from 17% in the previous quarter, and analysts had forecasted growth of around 11%. LVMH attributed the decline to post-Covid-19 normalization, high stock among retailers, and a slowdown in Hennessy cognac sales in the U.S. The disappointing results have also impacted other European luxury stocks, highlighting concerns about the changing dynamics within the luxury goods sector.