LVMH’s first quarter sales growth slips to 3% on luxury slowdown

By Thomson Reuters Apr 16, 2024 | 10:49 AM

By Mimosa Spencer and Dominique Patton

PARIS (Reuters) – LVMH reported a 3% rise in first quarter sales on Tuesday, marking a slowdown as rising prices prompted more shoppers who aspire to own its handbags and other luxury goods to hold back on splashing out thousands of dollars.

The slower quarterly sales growth reflected comparisons with the same period in 2023, when sales were boosted by the lifting of COVID-19 curbs in LVMH’s key market of mainland China and comes amid worries about a prolonged global slowdown which has knocked luxury companies’ shares over the past year.

The world’s largest luxury group, owner of Louis Vuitton, Tiffany & Co. and Bulgari, said sales for the quarter ending in March were up 3% year-on-year on an organic basis to 20.69 billion euros ($22 billion), matching analyst expectations.

LVMH, which is Europe’s second-largest listed company and worth nearly 400 billion euros, is the first luxury goods maker to report quarterly earnings, setting the tone as worries grow about demand in China, the world’s No. 2 economy.

Gucci-owner Kering last month issued a surprise warning that first quarter sales would slump 10%, with sharp declines in Asia, casting uncertainty for the sector’s outlook.

Sales at LVMH’s fashion and leather goods division, which includes Louis Vuitton and Dior, climbed 2%, also matching expectations.

Sales in the division, which sells small Lady Dior handbags priced at 5,400 euros and roomy Louis Vuitton Speedy bags for 10,000 euros, had risen by 9% year-on-year the previous quarter.

Chief Financial Officer Jean-Jacques Guiony told journalists that LVMH was “quite happy” with demand from Chinese shoppers.

He said purchases of Louis Vuitton products by Chinese buyers globally grew by around 10%, with an increasing proportion taking place outside mainland China as they resume travelling, particularly in Japan and to some extent in Europe.

LVMH, a conglomerate spanning spirits, jewellery, cosmetics and fashion which is regarded as a bellwether for the wider luxury goods industry, does not give a breakdown for its brands.

(Reporting by Mimosa Spencer and Dominique Patton; Editing by Alexander Smith)