From Financial Modeling Prep: 2025-04-15 06:58:00

Luxury giant LVMH faces pressure as Goldman Sachs cuts stock forecast due to weak Q1 performance, especially in Fashion & Leather Goods. Sales dropped 5%, missing expectations. New price target: €610. Primary concern: margin contraction from sustained sales pressure and slower recovery outlook in 2025.

Main issue is sharp decline in Chinese tourist spending in Japan, a key revenue driver in 2024. Q1 2024 Japan growth: +32%, Q2 2024: +57%, Q1 2025: Flat to slightly negative volumes. Product mix, once a growth engine, has now flattened, impacting profitability.

Goldman Sachs warns of ongoing challenges for LVMH, including foreign exchange headwinds and demand softness affecting margins. Structural slowdown in a key segment suggests caution for luxury sector investors. Chinese demand rebound is patchy, macroeconomic pressures persist, and FX volatility impacts revenue conversion.

Investors should monitor LVMH and luxury sector fundamentals closely amid ongoing challenges. While recent stumble isn’t catastrophic, it highlights sector vulnerability to macro shifts and consumer trends. Goldman Sachs advises caution until clear evidence of Asia rebound and margin stabilization emerges.



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