LVMH sales miss expectations as luxury recovery is put on pause amid Middle East war

Luxury conglomerate and industry bellwether LVMH  reported quarterly sales that missed expectations on Monday as the sector begins to decipher the fallout from the war in the Middle East and its impact on stocks. 

Organic sales grew 1% in the first quarter, but analysts surveyed by FactSet had expected 1.5% growth in the March quarter. 

The Middle East conflict had a 1% negative impact on organic growth in the quarter, LVMH said in a statement.

“LVMH maintained its powerful innovative momentum and showed good resilience in a geopolitical and economic environment that remained disrupted, amplified by the conflict in the Middle East,” the company said, also flagging a good start to the year in the U.S.

U.S.-listed shares of the French company fell over 4% on Monday.

Analysts broadly expect growth to pick up significantly in the next quarters as LVMH and others continue to try to reinvent themselves and win back customers. Many shoppers turned their back on brands following a luxury boom that ended in 2022, which saw significant price hikes and strategic decisions that alienated parts of their clientele.