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LVMH shares fall as much as 6.7% in early trade

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Luxury stocks have rallied recently on recovery hopes

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LVMH beat Q4 sales forecast, but margin pressured

(Recasts, adds stock milestones)

By Mimosa Spencer and Danilo Masoni

PARIS, Jan 29 (Reuters) - Shares in LVMH were

on track for their largest drop in 14 months on Wednesday after

the luxury goods group's latest sales figures disappointed

investors hoping for stronger signs of a rebound at the sector

bellwether.

The home of Louis Vuitton fashions and Bulgari jewellery

reported a 1% rise in fourth-quarter sales, beating estimates.

But its margin was weighed down by higher costs, with management

mostly citing one-off events like increased staff costs linked

to the Paris 2024 Olympics and an employee share scheme.

Shares in Europe's most valuable company fell as much as

6.7% in early trade and were down 5% at 1200 GMT. The

underwhelming update follows a string of strong releases from

rivals and a recovery rally that lifted LVMH shares more than

30% from the more than two-year low hit in November.

Gucci-owner Kering was down 6%. Hermes,

which is seen as best-placed to weather downturns thanks to a

wealthier customer base, was up 0.1%, close to record levels.

While fourth-quarter sales from LVMH's key fashion and

leather division, home to its top-earning Louis Vuitton and Dior

labels, were around 2 percentage points higher than

expectations, the beat was likely "not enough to call this an

inflection point," said Citi analyst Thomas Chauvet.

The luxury goods sector has been grappling with its slowest

sales in years, with a 2% fall last year according to Bain &

Company estimates, hit by a property crisis in China.

But recent expectation-beating results from firms including

Cartier owner Richemont and Burberry ( BBRYF ) have

fuelled hopes the sector is starting the year on firmer ground.

While LVMH's results "challenge the sector narrative that

all luxury companies have seen the acceleration" seen at

Richemont and Burberry ( BBRYF ), it reinforces the idea of a quicker

recovery this year than expected in October, Deutsche Bank

analysts said in a note to clients.

Luxury shares, which have been volatile since the winding

down of a post-pandemic boom, have risen since the start of

2025, with Richemont up 25% and Hermes up 15%.