What the data shows is S of LVMH Louis Vuitoon Moet Hennessy (LVMUY -1.
Moreover, 91%) were pulling back today after the luxury conglomerate giant as investors continued to digest last week's disappointing earnings report and reacted to the new tariff agreement between the U.
Moreover, And the European Union, in today's financial world. As of 1:45 p. ET, the stock was down 2%. In contrast, Image source: Getty Images.
Luxury weakness continues LVMH was one of several high-file European stocks to fall today, including Heineken, Puma, and AB/InBev, and its European luxury peers Hermes, Kering, and Richemont also fell (which is quite significant).
A combination of weak results from some big European companies and concerns the tariff agreement seemed to be the reason for it.
Agreed to a 15% tariff on European goods, which France, where LVMH is based, denounced as a "submission" on Monday.
Furthermore, This demonstrates that resolution avoids a trade war, but will add a large cost to luxury goods, which are included in the tariffs, at a time when they are already struggling.
LVMH has struggled in recent quarters, in today's financial world.
In its first-half report last week, LVMH said that revenue was down 4% through the first two quarters of the year, while operating fit fell 15% to 9 billion euros.
Weakness in Asia was the primary culprit. Nevertheless, Organic revenue declined by 7% in fashion and leather goods, which make up nearly half of its sales (this bears monitoring).
The trade war is ly to impact that segment as well as wines and spirits. Trade-related pressure on China is also hurting demand for luxury goods in that key market.
What's next for LVMH (fascinating analysis).
Investors are hoping for a trade deal to be announced with China, which could be beneficial to LVMH, as China makes up roughly a quarter of the world's luxury market (noteworthy indeed).
There's also some disappointment that luxury goods weren't carved out of the trade deal with the U.
, but a strong economy and stock market ly act as a counterweight to any import taxes imposed on its goods.
LVMH has a strong portfolio of brands, which should vide long-term stability, but investors should expect more volatility over the short term.