MC Lvmh Moet Hennessy Louis Vuitton SE

Sales at luxury group rose 4%, but were hurt by decline in tourism following Paris attacks

By Jason Chow 

PARIS -- A continued slowdown in tourism in France following the Nov. 13 terrorist attacks weighed on LVMH Moët Hennessy Louis Vuitton SE's first-quarter sales in one of its most important markets, the luxury juggernaut said on Monday.

LVMH, which owns a multitude of brands including flagship fashion label Louis Vuitton, champagne house Moët & Chandon and cognac label Hennessy, said sales rose just 4% to EUR8.62 billion ($9.83 billion) during the first three months of 2016. It blamed weak sales in France for the tepid result.

"The U.S. market is strong and Europe remains well oriented except for France which is affected by a fall in tourism," the company said.

The company's sales figure is below the average forecast of EUR8.73 billion by 37 analysts polled by FactSet.

LVMH doesn't release quarterly profit figures.

LVMH is often regarded as a bellwether for the entire luxury sector. Its portfolio includes brands that span fashion, accessories, liquor, jewelry and watches as well as the DFS duty-free chain and the Sephora cosmetics label.

While luxury's largest player has remained resilient to global economic volatility in recent years, the latest results show that it is vulnerable.

The company's overall organic revenue growth, which strips out the effects of currency, grew just 3% in the first quarter.

Sales in its fashion and leather-goods business, the largest division in its portfolio that includes Louis Vuitton, Fendi and Kenzo among others, were flat in the first quarter at EUR2.97 billion.

The year's first-quarter results are a contrast to a strong 2015. Sales surged then partly because of a strong trade among tourists in Paris, especially those from China, as they took advantage of a weak euro to splurge on expensive handbags and clothes.

LVMH, the first among the big European luxury companies to report results, still proved its diverse portfolio has helped it eke out growth.

Its spirits division saw a boost in cognac sales, a category that struggled between 2013 and 2015 due to a continuing austerity campaign by the Chinese government that has dried up thirst for the ostentatious beverage.

Sales of LVMH's wine and spirits division rose 4%.

Meanwhile, sales at its perfumes and cosmetics division grew 7% to EUR1.2 billion.

Sales at the selective retailing division, the company's second-largest business that includes the Sephora cosmetics chain, rose 4%.

Write to Jason Chow at jason.chow@wsj.com

(END) Dow Jones Newswires

April 12, 2016 02:16 ET (06:16 GMT)

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