What Happened: “In the U.S., we have a bit less momentum when it comes to e-commerce, especially because Amazon is being very aggressive and being aggressive is mostly regarding price and we try to avoid this technique,” Cabanis told analysts during the revenue call as LVMH reported disappointing first-quarter results.
The luxury conglomerate missed sales forecasts with a 3% decline in quarterly revenue, falling well below analyst expectations of 2% growth, according to Reuters. The U.S. market saw a 3% sales drop, with Cabanis specifically identifying Sephora as the main driver of the American deceleration.
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What Happened: The company’s core fashion and leather goods division, representing nearly half of group sales and over 75% of profits, posted a 5% decline. Meanwhile, sales in Asia excluding Japan tumbled 11%, reflecting continued weakness in China.
Needham analyst Laura Martin suggested Amazon uses its e-commerce business as a “loss-leader,” noting the company’s product sales have stagnated while higher-margin services revenue grows four times faster.
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