Michael Kors Holdings Ltd (NYSE:KORS) and other luxury retailers took a beating along with the rest of the market on Wednesday. Issues involving China and a slowdown in that market are being pointed to as catalysts.
Investor’s Business Daily explains.
Amid concerns of slowing demand from Chinese consumers and a government crackdown in China on luxury goods, shares of several luxury retail stocks are getting slammed Wednesday, including LVMH (LVMUY), Tiffany (TIF), Michael Kors (KORS) and Tapestry (TPR).
LVMH — parent of Louis Vuitton, Christian Dior, Sephora and other brands — lost 9.1% after disclosing a deceleration in revenue growth late Tuesday. (The stock trades on the Euronext Paris under the ticker LVMH and on U.S. over-the-counter markets as LVMUY.) Organic sales rose 10% during LVMH’s third quarter, down from 11% and 13% in the previous quarters, according to the Wall Street Journal.
While problems related to China could certainly be part of the problem for Kors and others, the bigger picture of the broad market selloff is also a large reason why share prices were hit so dramatically on Wednesday.
Michael Kors Holdings Ltd shares were unchanged in premarket trading Thursday. Year-to-date, KORS has declined -1.08%, versus a 5.65% rise in the benchmark S&P 500 index during the same period.