"Magnitude Of Deterioration": Wall Street Stunned By LVMH's Earnings

LVMH's first-quarter earnings significantly missed expectations, causing a stock price drop. Weakening demand in key markets like Asia and the US, fueled by trade tensions, impacted results. All segments underperformed, particularly Fashion & Leather Goods, LVMH's largest division. Significant revenue shortfalls were reported across geographic regions, with notable declines in China and the US. Analysts attributed the slowdown to various factors including decreased Chinese spending abroad and weaker US demand. Goldman Sachs lowered its price target, citing concerns about the demand environment and operational gearing. Other analysts also reduced their price targets and lowered earnings estimates, reflecting a pessimistic outlook. The revelation of Chinese manufacturers producing similar goods at significantly lower prices on TikTok adds to the concerns. LVMH's market capitalization was surpassed by Hermès, highlighting the shift in the luxury market. The overall sentiment suggests a potential broader slowdown in the high-end consumer market.