The conflict in the Middle East hit sales at LVMH in the first quarter, as shoppers and tourists in the region curbed their spending, denting hopes of a recovery this year for the global luxury sector.
First-quarter sales at the world’s largest luxury group rose 1 per cent on a like-for-like basis compared to a year ago, falling short of analysts’ expectations at €19.1bn. The company said that the US and Israel’s war on Iran had hit its bellwether fashion and leather goods division, where sales fell 2 per cent to €9.24bn — the seventh consecutive quarter of declines.
The conflict reduced group sales growth in March by 3 percentage points, as missile strikes on the Gulf including Dubai prompted shoppers to avoid the region’s malls. For the first quarter as a whole, it cost the group 1 percentage point in sales growth.