French luxury company LVMH's first quarter performance did not meet analysts' expectations. Its disappointing results in major markets like France and Hong Kong were to blame, the company said.
Fewer tourists in France
LVMH's first quarter turnover did grow 4 % to 8.6 billion euro, but that was below analysts' expectations, which stood at 8.7 billion euro. Particularly LVMH's fashion division, with brands like Dior and Louis Vuitton, was sub-par throughout the quarter. It brings in the most revenue, but with 2.96 billion euro, it remained level, while a 2 to 3 % growth was expected. “The US market is strong and Europe remains well oriented, except for France which is affected by a fall in tourism. Asian markets are varied, but Japan continues to progress.", LVMH says.
The company's other divisions did manage to present positive numbers: the liquor division's turnover grew 4 % to slightly above a billion euro, while the different cosmetics and perfume brands boosted turnover 7 % to 1.2 billion euro. The watch and jewelry division's turnover grew 7 % to 774 million euro, after suffering for several quarters because of decreased Chinese demand.