LVMH Cuts Dividend as 1Q Sales Fall on Coronavirus Hit

   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 [e-mail]

(END) Dow Jones Newswires

April 16, 2020 12:28 ET (16:28 GMT)

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