Stock Market: Kering and Hermès Plunge, Luxury Drags CAC 40 into the Red

Luxury Takes a Heavy Toll on the Parisian Index

The Paris session is dominated by a single theme: the market's punishment of the two French luxury giants after their quarterly reports. Kering and Hermès alone heavily weigh on the CAC 40, whose decline contrasts with the near-stability of the European STOXX 600 (-0.06%) and the slight rise of the German DAX (+0.08%). Wall Street had ended the previous day in the green, with the Dow Jones closing up by 0.66% and the S&P 500 by 1.18%. The Nikkei in Tokyo also finished the day with a gain of 0.44%. Paris stands out as an exception, a victim of its high exposure to the luxury sector.

The American naval blockade against Iran, which came into effect the previous day with six ships already prevented from leaving Iranian ports, and the passage of sanctioned Chinese tankers through the Strait of Hormuz, do not seem to be the main concern for the Paris market at this point. It is indeed the earnings season, and more specifically the figures from the luxury sector, that set the tone.

Kering drops 10%, Hermès down nearly 9% after their reports

The heavy blow comes from Kering, whose revenue stagnated in the first quarter while Gucci, the group's core, fell by 8%. The stock plummeted by 10.04% to 251.90 euros, the biggest drop in the CAC 40. Three strategic operations announced simultaneously—in beauty, jewelry, and real estate—were not enough to reassure investors. Bernstein lowered its price target from 235 to 220 euros, and Deutsche Bank from 290 to 280 euros, both maintaining their respective recommendations.

Just behind, Hermès dropped 8.81% to 1,626 euros. The saddle maker from Rue du Faubourg-Saint-Honoré managed to post an organic growth of 6% in the first quarter, but exchange rate effects wiped out 290 million euros in revenue, bringing the consolidated total to 4.1 billion euros. This disconnect between actual business momentum and accounting translation harshly penalized the stock.

Further down the list of declines, Safran fell by 1.89% to 311.40 euros, Saint-Gobain dropped by 1.13%, and Airbus lost 0.96%, with no specific catalyst identified for these three stocks.

Stellantis and Sanofi lead gains, driven by tangible news

Against the general trend, a few stocks are standing out thanks to favorable announcements. Stellantis leads the gains with a rise of 2.58% to 7.11 euros. The automaker announced a 12% increase in shipments for the first quarter, reaching 1.4 million units, reinforcing the scenario of operational recovery.

Sanofi is up 1.41% to 82.16 euros following the European Commission's approval of Dupixent for treating chronic spontaneous urticaria in children as young as 2 years old, expanding the commercial potential of its blockbuster.

Orange gains 0.87% to 17.93 euros, supported by BNP Paribas Exane's target price upgrade from 20 to 20.50 euros, with the recommendation maintained at « outperform. » Pernod Ricard (+0.66%) and Capgemini (+0.62%) round out the list of gainers, without any specific news identified. The end of the trading session will reveal whether the luxury sector's impact continues to weigh on the entire Paris market.