Goldman lifts LVMH price target; F&LG seen bottoming before Q3
Bottom Line Impact
If the Q3 F&LG decline moderates to around -2% and China traffic improves, LVMH can stabilize revenue, protect gross margin through full-price sell-through, and strengthen brand equity via high-impact activations, reinforcing category leadership into 2025.
Key Facts
5- Price target raised to €625 from €600 (+4.2%), Buy rating maintained ahead of October Q3 print
- Fashion & Leather Goods declined 9% at constant FX in Q2, the steepest drop among segments
- Goldman projects Q3 F&LG at approximately -2% vs market at -3% (100 bps beat vs consensus)
- Expected drivers: easier year-over-year comps in Q3 and a rebound in Chinese consumer demand
- Strategic levers in place: LV Beauté launch, Formula 1 collaboration, and new retail concepts to boost traffic
Time Horizons
Key Roles Affected
Executive Summary
Goldman Sachs raised LVMH's price target to €625 and signaled that the worst is likely over for Fashion & Leather Goods, with Q3 expected to show a smaller decline. If F&LG stabilizes as projected, investor sentiment and in-store traffic should improve into Q4, positioning LVMH to re-accelerate growth through China demand recovery and brand activations like LV Beauté and Formula 1.
Actionable Insights
Immediate Actions (Next 30-90 days)
Lock in Q4 experiential calendar around Formula 1 and Golden Week corridors, with quantified traffic and conversion targets per flagship
Rationale: Capitalize on sentiment shift to monetize high-intent traffic and reinforce brand heat at critical moments of Chinese and tourist demand recovery
Role affected:CEO
Urgency level:immediate
Update H2 guidance sensitivities with F&LG scenarios and hedge CNY and USD exposures; maintain capex bias to top-20 flagships
Rationale: A 100-200 bps swing in F&LG growth materially affects group trajectory; FX and capex discipline protect margins while preserving growth options
Role affected:CFO
Urgency level:immediate
Short-term Actions (6-12 months)
Integrate LV Beauté into omnichannel journeys with Sephora and clienteling, targeting a 3-5% basket uplift via beauty add-ons for F&LG clients
Rationale: Beauty adjacency can increase visit frequency and entry-level conversion without diluting F&LG price integrity
Role affected:CMO
Urgency level:short-term
Shift buy plans 5-10% above Q2 run-rate for top 30 hero SKUs contingent on October traffic; enforce full-price sell-through thresholds
Rationale: Selective inventory re-acceleration captures upside while guarding against markdown risk
Role affected:Head of Retail
Urgency level:short-term
Risks & Opportunities
Primary Risks
- China demand recovery stalls or is uneven across tiers and travel hubs
- Price elasticity drives mix down-trading, pressuring F&LG margin
- Event and collaboration ROI underdelivers, limiting traffic uplift
Primary Opportunities
- Sentiment tailwind supports targeted Q4 price harmonization and mix upgrades
- LV Beauté cross-sell increases visit frequency and basket size among new-to-brand clients
- Formula 1 platform unlocks high-net-worth client acquisition in priority cities