Sales for luxury conglomerate LVMH missed expectations for the first quarter as the sector grapples with the fallout caused by the war in the Middle East.
First quarter organic sales grew 1%, which is lower than the 1.5% expected by analysts surveyed by FactSheet. Total revenue was €19.1 billion.
The company said the war in Iran had a negative impact of around 1% on organic growth for the quarter.
“LVMH maintained its powerful innovative momentum and showed good resilience in a geopolitical and economic environment that remained disrupted, amplified by the conflict in the Middle East,” the company said in a statement.
Analysts expected growth to pick up significantly for the company and sector.
Many shoppers turned their back on brands following a luxury boom that ended in 2022, which saw significant price hikes and strategic decisions that alienated parts of their clientele.
This comes as the luxury sector showed some signs of recovery after a years-long slump, driven by soft demand from Chinese consumers, formerly one of the sector’s main growth drivers.
LVMH’s fashion and leather goods division, which includes its biggest brands like Louis Vuitton, Dior and Fendi, fell 2% to €9.2 billion in constant currencies for the quarter.
Its watches and jewellery division saw the largest growth of 7% to €2.4 billion.
This was driven by a strong performance from Tiffany.
On a reported basis, sales for the business declined 6% in the quarter, driven by unfavourable exchange rates.
At the time of writing, LVMH (EPA: MC) stock was down 0.32% to €481.75.
