LVMH Cuts Dividend as 1Q Sales Fall on Coronavirus Hit
16 Aprile 2020 - 6:43PM
Dow Jones News
By Pietro Lombardi
LVMH Moet Hennessy Louis Vuitton SE's first-quarter revenue fell
significantly, hit by measures taken by authorities around the
world to tackle the coronavirus pandemic.
The company also cut its dividend for 2019 and warned that the
second quarter will be severely affected by the crisis, with
closure of stores and production sites also hitting results for
this year.
The French conglomerate, which controls brands like Louis
Vuitton, Bulgari and Christian Dior, is the world's biggest
luxury-goods company, and it's results are seen as a bellwether for
the industry. It is the first large luxury-goods company to report
revenue for the three months to March 31, thus giving an indication
of what to expect from peers.
Revenue for the period fell 15% to 10.60 billion euros ($11.59
billion), it said Thursday. Organically, revenue shrank 17%.
The company had previously warned that first-quarter revenue was
expected to fall between 10% and 20%.
Sales declined across business segments, with its key fashion
and leather-goods business--including Louis Vuitton, Dior and
Fendi--posting a 9% fall. Other divisions reported sharper
declines, with watches and jewelry down 24%.
Countries around the world have taken drastic measures to fight
the coronavirus pandemic, forcing closures of stores and production
sites. This has dealt a blow to the company's sales in the first
quarter and will hit hard in the second quarter too, while also
weighing on the results for the year.
"This impact cannot be precisely evaluated at this stage," it
said.
"We can only hope that the recovery happens gradually from May
or June after a second quarter which will still be very affected by
the crisis, in particular in Europe and the U.S."
The company said that shopping at its Sephora stores "has
gradually picked up in China since early April." Chinese shoppers
are a key clientele for the luxury industry, both at home and when
they travel abroad.
The company cut its dividend for 2019 by 30% to EUR4.80 a
share.
Write to Pietro Lombardi at pietro.lombardi@dowjones.com
(END) Dow Jones Newswires
April 16, 2020 12:28 ET (16:28 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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