Louis Vuitton shares hit despite 4pc sales rise
SHARES in LVMH Moet Hennessy Louis Vuitton fell the most in more than two years yesterday after slowing fashion and leather-goods growth suggested that efforts to turn around its biggest brand have yet to take hold.
Shares dropped as much as 6.6pc to €135.35 in Paris after the company said sales at LVMH's fashion and leather-goods division rose a disappointing 4pc in the first nine months of 2013. That marked a slowdown from the first-half's 5pc gain and trailed the 6pc median estimate of 11 analysts. Perfume and cosmetics growth also weakened, prompting share-price drops in rivals from Swatch Group to L'Oreal.
"The market was expecting F&L trends to accelerate further given a much easier comparative, pricing effects and early signs of Vuitton's repositioning," said Thomas Chauvet, an analyst at Citigroup.
The slowdown "confirms our view that it will take time (likely another 12 months) for initiatives to bolster the leather handbag offer at Louis Vuitton to produce tangible results," said Allegra Perry, analyst at Cantor Fitzgerald.
Vuitton is slowing retail expansion, adding more precious materials to its ranges and adding products with fewer logos in an effort to appeal to the wealthiest shoppers.