But the first few months of the year aren’t as cheery a start as it hoped. 

The Paris-based LVMH, which owns brands like Christian Dior, Tiffany & Co., and Loro Piana, saw a slowdown in sales growth as shoppers continue to contemplate their spending on high-end goods. First-quarter revenues grew by only 3% to €20.7 billion ($22 billion), broadly in line with analyst expectations, the company reported late Tuesday.

The French conglomerate is widely considered the luxury industry’s bellwether. It’s a leading player and operates in various segments of luxury retail, from apparel and watches to alcohol. 

Among these segments, wines and spirits, including Champagne and Hennessy cognac, witnessed the sharpest sales decline of 12% for the quarter compared to the same period in 2023. Meanwhile, the group’s selective retailing department, which includes Sephora, grew by 11%.  

Japanese shoppers were key to LVMH’s single-digit revenue growth, while those in the U.S. and Europe showed a limited yet positive appetite. 

The rest of Asia, however, pulled back from high-end spending significantly in the first quarter, compared to a year ago. 

Comparison is key 

A slowdown in demand has plagued the luxury industry for the last few months, with rivals like Kering issuing a profit warning to signal the stalling appetite. Luxury giants were hoping that an economic recovery in China could fuel much-needed growth, but that hasn’t quite played out yet.   

While the Arnault-owned LVMH’s results don’t look optimistic at first blush, it’s not as bad as it seems, CFO Jean-Jacques Guiony pointed out during the company’s earnings call. 

Notably, in China, the company’s fourth-quarter numbers from late 2023 appeared strong mainly because they were compared to those from a year prior. Similarly, 2024’s first-quarter comparison to the same time a year ago, when the appetite for demand looked different, is the reason for a stark difference.

“We are anniversarizing a pretty strong business last year in Q1 following at the end of the zero-COVID policy,” Guiony said, adding that he was “quite happy” with the overall growth of LVMH’s business in its key Asian market.

Analysts echoed the same, as demand from Chinese shoppers has been critical in shaping luxury brands’ performance over the years.

LVMH’s results aren’t “a surprise given the very difficult comparison base from last year, which showed 17% growth for the group and 18% for fashion and leather goods. The comparison base gets easier in the second half of the year,” said Morningstar’s senior equity analyst Jelena Sokolova in a Wednesday note. If anything, the pent-up demand from Chinese shoppers is starting to play out slowly but surely.

It’s a murky picture, though—among China’s shoppers, “sentiment remains sluggish due to weak asset markets and the timing of a rebound is hard to predict,” Sokolova said earlier. 

But she said she’s a little more worried about European and American consumer demand, as those looked weak following pandemic-era highs. 

Guiony also thinks the improvement will be “very gradual” in markets like the U.S., as aspirational consumers recover from high costs. This process could take several quarters, if not a year, he said.