LVMH Leads Luxury Share Slide as Terror Attacks Damp Tourismby
Stock declines as much as 3.8%; France hit by fall in tourism
LVMH had proven resilient to waning demand for high-end items
LVMH dragged luxury stocks lower after the maker of Celine handbags reported weaker-than-expected revenue growth, dealing a fresh blow to industry sentiment.
The world’s biggest luxury-goods maker had proven resilient to ebbing demand that caused Prada SpA to report its lowest annual profit in five years. Yet the miss shows LVMH is not immune. The attacks in Paris and Brussels and new biometric visa requirements deterring leisure travel from Asia are weighing on European sales. Collapsing demand in Hong Kong and China, meanwhile, has led companies to curtail expansion there.
“The financial impact of recent terror attacks continues to take its toll,” John Guy, an analyst at MainFirst Bank AG, said in a note.
First-quarter sales gained 3 percent on an organic basis, decelerated from 5 percent in the previous period, LVMH said. Unchanged revenue at its biggest division, fashion and leather-goods, also missed estimates.
LVMH said sales in France -- which accounts for about 10 percent of its business -- were hurt by a drop in tourism. Total revenue for the period rose 4 percent to 8.62 billion euros ($9.9 billion). Analysts predicted 8.73 billion euros.
LVMH, whose full name is LVMH Moet Hennessy Louis Vuitton SE, holds a conference call with analysts later on Tuesday.