Luxury goods investors will look to LVMH for any glimmers of hope about recovery prospects when the French company reports second-quarter results, set to reveal an unprecedented sales slump due to the coronavirus pandemic.
Thanks to its financial strength and a diversified portfolio that includes champagne and spirits as well as perfume and beauty chain Sephora, LVMH is generally expected to weather the COVID-19 crisis better than most rivals.
That is mirrored in its share price, which is just 9% lower than its pre-COVID 19 peak, compared to minus 18% for Gucci owner Kering, which will also release results next week, and minus 40% for Burberry.
Yet sales for the three months to June -- the hardest hit since much of the world was under lockdown -- are forecast to plunge around 40% on a like-for-like basis, a touch better than the sector average but not a significant outperformance.
That is partly due to an unfavourable regional mix for the quarter. LVMH is more U.S.-driven than China-heavy relative to peers even before the planned purchase of Tiffany. A big rebound in the key Chinese market, where shops reopened earlier, may have had less of a mitigating effect.
The main focus in LVMH's earnings on 27 July is likely to be the outlook for the second part of the year.
'Indicator of Confidence'
Analysts say one thing to watch as an indicator of confidence is the trend in advertising spending and high-profile events, which most luxury groups cut back as the crisis hit.
There are some signals already that point to LVMH, the world's biggest luxury goods group, being more upbeat than others about how quickly it can turn the corner.
LVMH's top fashion brands Louis Vuitton and Dior have raised prices recently, and Dior has also been very active in the past few weeks - it presented two new collections, opened a flagship store in Paris and held a series of events in China.
Chairman Bernard Arnault has flagged some "quite vigorous" signs of recovery in June, as virus lockdowns lifted in much of Europe, even as he acknowledged that the fallout from the crisis would weigh on the group's performance for some time yet.
Cartier owner Richemont, whose sales almost halved in the three months to June, has warned the impact of the pandemic could last up to three years.
And Burberry, which also reported dire results for the quarter, forecast no quick recovery in demand and cut around 500 jobs.