Editor’s Note
This article discusses LVMH’s recent quarterly sales report, which fell short of market expectations. The performance highlights challenges in key markets and segments for the luxury sector.
The luxury leader reported disappointing sales on Monday evening, with figures for the first quarter falling short of expectations, particularly in its fashion and leather goods division. LVMH also suffered from deteriorating demand in China and, to a lesser extent, in the United States.
For the period from January to the end of March, the luxury leader recorded revenues of 20.311 billion euros. This represents a 2% decline in reported sales and a 3% decline in comparable sales (with a +1% currency effect and a neutral scope effect). According to a Visible Alpha consensus cited by Reuters, analysts had expected a 2% increase in comparable revenues. This marks a sequential deterioration from the previous quarter, where the luxury group’s revenue had grown by 1% on a comparable basis.
Much of the disappointment stems from the company’s largest division, “Fashion and Leather Goods.” In the first three months of the year, this division’s revenue fell by 5% on a comparable basis.
Among other divisions, “Perfumes and Cosmetics” also declined by 1% on a comparable basis. The “Watches and Jewelry” division was stable but marked a sequential slowdown after 3% comparable growth in the fourth quarter.
In Selective Retailing (Sephora, airport sales), this division saw its sales contract by 1%, where the consensus was more optimistic (+5%), following a 7% increase at the end of 2024. Jie Zhang explains that Sephora’s slight deceleration in the US is linked to strong competition from Amazon and its aggressive pricing strategy.
“Wines and Spirits” recorded a 9% decline in comparable sales.
By region, the United States showed a 3% decline in comparable data, compared to 3% growth in the previous quarter.
However, risks related to tariffs announced by the US administration and then suspended for some by Donald Trump raise fears of a contraction in the luxury market this year. For LVMH, the United States contributed 24% of the luxury group’s revenue in the first three months. The company says it is prepared to overcome US tariffs.
AlphaValue recalls that the group stated it remained difficult to assess the impact of tariffs and that it continued to believe negotiations could lead to a favorable outcome.
