French Stocks Fall Amid Luxury Sector Losses

French stocks are encountering downward pressure in the market today, particularly influenced by disappointing earnings from luxury giant LVMH. Investors await insights from upcoming Federal Reserve and ECB announcements.

Date: 29-01-2025

AI Rating: 4

Impact on LVMH's Stock and Earnings Summary

LVMH's results significantly affect not only its own stock but also that of other companies in the luxury sector and the broader market. The company reported a net profit for 2024 of 12.550 billion euros, which is a substantial decline of 17% compared to 15.174 billion euros from the previous year. Furthermore, the company's profit from recurring operations also fell by 14%, signaling potential issues in maintaining profitability.

Revenue for LVMH also experienced a decline of 2%, dropping from 86.153 billion euros to 84.683 billion euros. Despite reporting organic growth of 1%, this has come amidst a challenging economic environment and a tough year-over-year comparison following robust post-Covid recovery growth.

Overall Market Sentiment and Other Companies

The impact on LVMH's stock price, which is down over 6%, arguably drags down the luxury sector overall, affecting peers like Kering and L'Oreal—down 6.1% and 2.6%, respectively. The broad decline in these major luxury brands may signal investor caution as they react to earnings news and economic conditions influencing consumer spending.

The CAC 40 index, reflecting the performance of the French stock market, is also negatively affected, showing a decrease of 0.3%. This drop may lead to a pessimistic outlook among investors as they await monetary policy decisions from the Federal Reserve and the European Central Bank, which could further influence market conditions.

Stocks: LVMH KER OR RMS