Shares of luxury brands owner LVMH fall as Trump tariffs stoke recession fears
LVMH was overtaken by rival Hermès in market capitalisation on Tuesday.
The Money Show's Stephen Grootes is joined by Evan Walker, portfolio manager at 36ONE Asset Management.
Dominant luxury goods company LVMH saw its share price drop almost 8% on Tuesday, after it posted an unexpected decline in first-quarter sales.
The European giant - owner of brands like Louis Vuitton, Dior and beauty chain Sephora - lost its top spot to rival Hermès.
Reuters describes LVMH as the sector bellwether, and ascribes its lower-than-expected sales to investor pessimism..
The drop in share price brought its market capitalisation down to €246 billion, compared to €247 billion for Hermès.
While market turmoil amid the US President's changing tariff threats stoked the share drop, LVMH's disappointing sales were in evidence before Donald Trump announced these.
Stephen Grootes talks to Evan Walker, portfolio manager at 36ONE Asset Management, who says this illustrates a current trend.
"We've seen markets come off, we've seen bitcoin come off, we've seen quite a lot of pressure specifically in the Asian markets.... Consumer confidence is down globally; coming into this first quarter we saw a bit of a dip and now the ramifications are coming through."
Evan Walker, Portfolio Manager - 36ONE Asset Management
At the same time, it is necessary to put LVMH's performance into context coming off a high base, Walker says.
He notes that in 2023, their earnings were up 130% over the four years from 2019, which shows phenomenal growth.
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