A weaker-than-expected revenue report was the news item driving down LVMH Moët Hennessy -- Louis Vuitton's (LVMUY -6.22%) American depositary shares (ADS) on Monday. The luxury goods maker saw its ADS price sag by more than 6% as a result, contrasting unfavorably with the S&P 500 index's 0.8% increase on the day. First-quarter flopOn Sunday, LVMH published details of its first-quarter revenue, showing that its total top line for the period was just over 20.3 billion euros ($23.1 billion). That figure was do ...

TVMH Q1 2025 revenue April 14, 2025 CD This document may contain certain forward looking statements which are based on estimations and forecasts. By their nature, these forward looking statements are subject to important risks and uncertainties and factors beyond our control or ability to predict, in particular those described in IVMF i Universal Registration Document which is available on the website (www.lymh.com). These forward looking statements should not be considered as a guarantee of future performa ...

Core Viewpoint - LVMH's stock has declined due to tariff concerns stemming from U.S. trade actions against Canada, Mexico, and China, with a notable drop of approximately 2.4% in a single day [1]. Group 1: Tariff Exposure - LVMH, as a global seller of luxury goods, faces potential risks from tariffs, particularly with China being a significant market for the company [2][3]. - The U.S. has imposed a 10% tariff on goods from China and 25% on goods from Canada and Mexico, which has created uncertainty in global markets [2]. - The company is particularly vulnerable to price increases due to tariffs, as luxury products are non-essential and consumers can find substitutes [4]. Group 2: Financial Performance - LVMH reported disappointing fourth-quarter earnings, with only 1% organic revenue growth, indicating challenges in China and the broader global economic environment [5]. - The company's revenue from Asia, excluding Japan, was substantial at 23.3 billion euros last year, highlighting its reliance on this market [3]. Group 3: Future Outlook - The company's fortunes are closely linked to the global economy, and a potential trade war could further challenge growth prospects, making 2025 a difficult year for LVMH [6].

Core Insights - LVMH's stock experienced a decline of over 2% following the release of its quarterly and annual results, contrasting with a nearly 1% rise in the S&P 500 [1] Financial Performance - In Q4 2024, LVMH reported total revenue of 23.9 billion euros ($25.1 billion), which was essentially flat year over year [2] - For the entire year of 2024, LVMH's revenue was nearly 84.7 billion euros ($88.8 billion), down by 2% from 2023 [3] - The fashion and leather goods segment, the largest category, saw a 3% decline to slightly over 41 billion euros ($43 billion) for the year [3] - The wines and spirits segment experienced the most significant drop, with an 11% decrease to less than 5.8 billion euros ($6.1 billion) [3] - Profitability fell sharply, landing at under 12.6 billion euros ($13.2 billion), representing a 17% decline from the previous year [4] Market Sentiment - Analysts had anticipated steeper declines in revenue, but the reported figures were still not encouraging [5] - Despite the weaker performance, LVMH's CEO emphasized the company's resilience in a challenging environment, highlighting the strength of its strategy [5] - Investors are seeking growth and improvement beyond just meeting analyst projections, indicating a desire for increased sales and profitability [6]

Louis Vuitton 02 This document may contain certain forward-looking statements, which are based on estimations and forecasts. By their nature, these forward-looking statements are subject to significant risks and uncertainties and factors beyond our control or ability to predict, in particular those described in IVMFs Universal Registration Document, which is available on the website (www.lvmh.com). These forward-looking statements should not be considered as a guarantee of future performance; actual results ...

Core Insights - LVMH shares rose significantly following a strong earnings report from Richemont, indicating a potential recovery in the luxury sector [1][5] Group 1: Richemont's Performance - Richemont reported a 10% increase in third-quarter sales, reaching 6.2 billion euros ($6.4 billion), with double-digit growth across most regions [2][3] - Sales in the Asia-Pacific region fell by 7%, with a notable 18% decline in China, a critical market for luxury goods [3][4] - The jewelry segment saw a robust 14% increase, reflecting broad-based growth across product categories [3] Group 2: Implications for LVMH - LVMH has faced challenges, particularly in China, with organic revenue remaining flat through the first three quarters of 2024, partly due to an 8% decline in wines and spirits [4] - Despite differences in product focus, the luxury sector tends to move in tandem, suggesting that Richemont's positive results could benefit LVMH [4][5] - The overall sentiment indicates that a turnaround in the luxury sector is anticipated, which bodes well for LVMH [5]

Core Message - The US Surgeon General warns that alcohol consumption increases the risk of at least seven types of cancer, including breast, colorectal, esophageal, liver, oral, pharyngeal, and laryngeal cancers [1][2] - 16.4% of total breast cancer cases are attributable to alcohol consumption, and alcohol is blamed for 20,000 cancer deaths annually in the US [2] - Less than half of Americans recognize alcohol as a risk factor for cancer, prompting the Surgeon General to recommend warning labels on all types of alcoholic beverages [3] Impact on Alcohol Stocks - Shares of Boston Beer (SAM) fell 3.6%, Molson Coors (TAP) dropped 2.2%, and LVMH Moet Hennessy (LVMUY) declined 2.8% following the announcement [1] - Investors are selling off alcohol stocks due to the heightened risk of potential sales impact from cancer warning labels [4] - The recommendation for warning labels is not certain, as it would require an act of Congress and may not be pursued by the incoming Surgeon General under the Trump administration [5][6] Industry Perspective - Historical precedent shows that despite decades of warnings about tobacco's cancer risks, people continue to smoke, suggesting that cancer labels on alcohol may not significantly reduce consumption [7] - The current sell-off in alcohol stocks may present buying opportunities, with Molson Coors (TAP) highlighted as a potential value stock due to its price-to-earnings ratio of less than 13 and a 3% dividend yield [8]

Core Viewpoint - LVMH Moët Hennessy has a strong product lineup and is currently undervalued, making it an attractive investment opportunity despite facing challenges in key markets [1][2][3] Group 1: Analyst Recommendations - TD Cowen's Oliver Chen has reiterated a buy recommendation for LVMH with a price target of 700 euros ($755) per share, citing the company's strong brand portfolio [2] - Chen is optimistic about LVMH's plans to introduce more moderately priced products to attract aspirational customers [2] Group 2: Market Challenges - LVMH's third-quarter revenue update indicated a 3% year-over-year decline in overall sales, primarily due to weaker demand in China [3] - The company also faced challenges from lower economic growth in Japan, contributing to the overall sales decline [3] Group 3: Valuation and Brand Strength - Despite the sales decline, LVMH is considered relatively cheap in terms of valuations, and its brand power remains robust [3] - The company's strong brand portfolio is seen as a key asset that could help it rebound in the future [2][3]

Core Viewpoint - LVMH Moët Hennessy experienced a significant decline in stock value following a disappointing revenue update, with shares dropping nearly 8%, contrasting sharply with the S&P 500's 0.9% decline [1]. Group 1: Revenue Performance - In the third quarter, LVMH's overall revenue fell by 3% year over year to just under 9.2 billion euros (approximately $10 billion), primarily due to a 5% decline in its key product category: fashion and leather goods [3]. - Fashion and leather goods accounted for 48% of LVMH's total revenue for the period, making it the largest revenue contributor, while selective retailing followed at 21% [4]. - Despite the overall decline, some product categories saw growth, with perfumes and cosmetics increasing by 3% and selective retailing gaining 2% [4]. Group 2: Market Conditions - The decline in fashion and leather goods marks LVMH's first downturn in this category since the COVID-19 pandemic, which is concerning given analysts had anticipated a slight gain [5]. - The drop in demand is attributed to a more cautious consumer base, particularly in China and Japan, which are critical markets for the company [3][6].

Financial Data and Key Metrics - Revenue for the first nine months of 2024 reached EUR60.8 billion, stable on an organic basis but down 2% on a reported basis due to a negative 2% currency impact and a negative 1% scope impact [4] - Wines and Spirits revenue decreased by 8% on an organic basis and 11% on a reported basis, with Champagne and Wines down 6% organically and Cognac and Spirits down 11% organically [7] - Fashion and Leather Goods revenue decreased by 1% on an organic basis and 3% on a reported basis [10] - Perfumes and Cosmetics revenue increased by 5% on an organic basis and 2% on a reported basis [14] - Watches and Jewelry revenue decreased by 3% on an organic basis and 5% on a reported basis [16] - Selective Retailing revenue increased by 6% on an organic basis and 1% on a reported basis [20] Business Line Performance - Wines and Spirits saw modest improvement in Champagne and Wines, with growth in Japan offsetting softness in Europe and the US [8] - Fashion and Leather Goods saw strong innovation from Louis Vuitton and Christian Dior, with new product launches and high-profile collaborations [10][11][12] - Perfumes and Cosmetics benefited from strong performance in fragrances, particularly from Parfums Christian Dior and Guerlain [14][15] - Watches and Jewelry saw resilience, with Tiffany expanding its product range and Bulgari celebrating its 140th anniversary [17][18] - Selective Retailing saw strong performance from Sephora, with market share gains in North America, Europe, and the Middle East [20] Market Performance - Europe and the US saw a 1-point increase in revenue mix, while Japan increased by 2 points and Asia fell by 3 points [4] - Chinese client purchases outside mainland China had a positive impact on Japan but a negative impact on the rest of Asia [5] - Demand from Chinese clientele remained dynamic in the first half but faced macroeconomic headwinds, while Western clientele showed gradual improvement [3][4] Strategic Direction and Industry Competition - The company emphasized product innovation as a key growth driver, leveraging its talent pool to translate creativity into commercial success [23] - Investments in distribution networks and communication were highlighted as important, with no need for acceleration in spending [23] - The company remains confident in the enduring appetite of Chinese consumers for luxury goods, expecting demand to recover when confidence improves [22][23] Management Commentary on Operating Environment and Future Outlook - Consumer confidence in mainland China is at an all-time low, similar to levels seen during COVID, impacting discretionary spending [22] - The company expects demand to recover in China when confidence improves, given the strong demand seen in the first half of the year [23] - The company is adjusting costs in response to the current environment but remains committed to long-term investments in innovation and distribution [23][24] Other Important Information - The company announced a strategic investment in French Bloom, a non-alcoholic sparkling wine producer [9] - Louis Vuitton was a key partner for the Paris 2024 Olympic and Paralympic Games and returned as the title partner of the Louis Vuitton 37th America's Cup [10] - The company launched SirDavis Whiskey in partnership with Beyoncé Knowles-Carter, which has already won several prestigious awards [9] Q&A Session Summary Question: Impact of Chinese stimulus on consumer demand - The company noted that Chinese authorities are taking measures to address consumption issues, but the impact of these measures remains uncertain [31][32] Question: Management changes and their implications - The company highlighted the retirement of Chris de Lapuente and expressed confidence in the continuity of its management strategy [32] Question: Strategy changes to address aspirational consumer loss - The company emphasized that the current slowdown is demand-driven rather than offer-driven and will continue to innovate without drastically changing its product range [34][35] Question: Performance of Watches and Jewelry in China - Watches and Jewelry saw a similar trend to Fashion and Leather Goods in China, with no further deterioration in Q3 [37][51] Question: Impact of anti-dumping deposits on Hennessy in China - The company noted that China accounts for less than 20% of Hennessy's business and that the impact of the anti-dumping deposit will depend on various factors, including competition response [42] Question: Trends in onshore vs offshore Chinese spending - Offshore spending by Chinese consumers has increased, with Japan being a key destination, while onshore spending has weakened [48] Question: Outlook for US demand - The company noted slight improvements in the US market, particularly in Cognac and Tiffany, but remained cautious about the overall outlook [69] Question: Retail plans for key Maisons - The company plans to continue renovating Tiffany stores, with 25% already renovated, and expects double-digit growth in these stores [49][78] Question: Impact of Champagne harvest on profitability - The Champagne harvest yield was significantly lower than last year, leading to an expected negative impact of EUR40-50 million on profitability [80] Question: A&P spending and working capital management - The company noted that A&P spending is easier to adjust and that working capital management will be challenging due to excess inventories [83][84] Question: Investment in Moncler - The company described its investment in Moncler as a long-term, limited investment alongside Remo Ruffini, with no plans for further acquisitions [85]