(Bloomberg) — LVMH sales fell at the start of the year as wealthy shoppers reined in purchases of pricey handbags as threats of a trade war roiled financial markets.
Revenue at the French luxury group’s fashion and leather goods division, its largest unit, fell 5% in the first quarter on an organic basis, LVMH Moët Hennessy Louis Vuitton SE said in a statement Monday. Analysts had expected a drop of 0.55%.
Louis Vuitton owner LVMH is the first European luxury group to release first-quarter results. The company, headed by billionaire Bernard Arnault, is generally considered a bellwether for the industry because it sells a wide range of high-end goods, from Christian Dior jackets to Tiffany engagement rings, Tag Heuer watches and Dom Perignon Champagne.
The luxury market has been struggling to emerge from a period of sluggish growth caused in part by Chinese shoppers reining in high-end purchases. The industry’s outlook has grown even murkier since US President Donald Trump this month slapped 10% tariffs on imports from the European Union for 90 days, after threatening even higher levies.
The trade turmoil sent European shares tumbling in recent weeks. LVMH is down 17% so far this year.
Analysts and investors will scrutinize what new Chief Financial Officer Cecile Cabanis says about tariffs, China and the current state of luxury demand during a conference call after the results. Her predecessor, Jean-Jacques Guiony, moved in February to oversee the company’s struggling wines and spirits division, which is suffering from tariffs imposed by China on its Hennessy Cognac.
Later this week, Moncler SpA, the maker of expensive ski jackets, and Birkin-bag maker Hermès International SCA will report sales, while LVMH’s Arnault is expected to speak at the annual shareholders’ meeting Thursday.
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