LVMH H1 26 performance was slightly better than expected, fashion leather goods returned to growth, but the recovery was weaker than peers, maintaining neutral (J.P. Morgan)
JPMorgan Chase's report showed that LVMH's H1 26 performance was slightly better than expected, sales were in line with expectations, and profit margins strengthened due to strict cost control.
JPMorgan Chase's report showed that LVMH's H1 26 performance was slightly better than expected, sales were in line with expectations, and profit margins strengthened due to strict cost control. The key message is that its core fashion leather goods department has returned to slight positive growth after seven consecutive quarters of decline, and Dior has accelerated its positive turn. However, the overall recovery is still weaker than that of competitors such as Hermès. The market has expectations for the recovery of the luxury goods industry, but LVMH's performance shows that the recovery is moderate and differentiated. It is believed that the valuation is supported but lacks a strong catalyst. It is highlights that it is not appropriate to chase higher before seeing a positive earnings revision. One-sentence conclusion: LVMH's performance slightly exceeded expectations, and the bottoming out of the fashion leather goods business is a positive sign. However, the recovery is not as strong as previously expected, and the stock price lacks a catalyst for a substantial upward move. Pro/Con: Neutral LVMH (LVMH.PA). The current share price has partially reflected the marginal improvement in its performance, but compared with other luxury goods peers, its recovery is weak and its valuation is unattractive. Catalysts: 1) H2 26 performance to verify whether the growth trend of the fashion leather goods business can be sustained; 2) consumption data in the Chinese market; 3) whether the company will increase profit margins through price increases or cost control.