LVMH Joins Luxury Peers as Sales Miss Estimates on Slowdownby
France hit by fall in tourism while Asian markets are `varied'
LVMH had proven resilient to waning demand for high-end items
The luxury industry’s slowdown claimed another victim as LVMH’s sales trailed analysts’ estimates on a decline in tourism following the terror attacks in Europe.
First-quarter sales gained 3 percent, excluding currency swings and acquisitions, Paris-based LVMH said in a statement after markets closed on Monday. That was below the 4.1 percent median estimate of 20 analysts and a deceleration from the previous period’s 5 percent uptick. Revenue was unchanged at its biggest division, fashion and leather goods, missing analysts’ estimate for 2.5 percent growth.
LVMH had proven resilient to ebbing demand that’s hurt peers such as Prada SpA, which said in a presentation Monday that it will close more stores after reporting its lowest profit in five years. Yet the miss shows LVMH is not immune. Terror attacks in Paris and Brussels and new biometric visa requirements deterring leisure travel are weighing on European sales. Collapsing demand in Hong Kong and China, meanwhile, has led companies to curtail expansion there.
The company and its leather-goods unit “are so big that they can be seen as a proxy of the luxury-goods sector -- and the luxury-goods sector is on the back foot,” Luca Solca, an analyst at Exane BNP Paribas, said in a note.
LVMH said its performance in Asia was “varied,” while France -- which accounts for about 10 percent of its business -- was hurt by falling tourism.
Total revenue for the period rose 4 percent to 8.62 billion euros ($9.8 billion). Analysts predicted 8.73 billion euros.
LVMH, whose full name is LVMH Moet Hennessy Louis Vuitton SE, holds a conference call with analysts on Tuesday. The shares rose 0.3 percent to 146.05 euros at the close in Paris Monday.