LVMH sees slowing demand in Q1, worry echos through sector

French luxury conglomerate LVMH reported slow sales and a decrease in revenue in the first quarter amid rising prices due to an uncertain economic and geopolitical climate.

Sales growth slowed to 3%, compared to a 17% increase during the same period last year when the company witnessed a rise in demand after pandemic restrictions were lifted in LVMH’s key market, China. But this year, the owner of Louis Vuitton, Tiffany & Co. and Bulgari said sales in Asia declined 6% (excluding Japan), while the US and Europe growth accounted for just 2%.

LVMH’s Q1 revenue was $22 billion (€20.69 billion), missing analysts’ expectations of $22.58 billion (€21.14 billion).

Europe’s second-largest listed company is the first luxury goods maker to report Q1 earnings, casting doubts about the sector’s growth this year.

Run by the world’s richest person, Bernard Arnault, LVMH might consider cost-saving measures, potentially impacting other companies in the fashion sector. It owns 75 luxury brands.

Kering, which owns Gucci, recently warned of a slump in its first-quarter revenues.