(Reuters) – Luxury giant LVMH reported 3 percent organic revenue growth in the first quarter, marking a slowdown as inflation prompted more shoppers to exercise restraint.

The world number one luxury brand, which owns, among others, the Louis Vuitton and Dior brands, as well as the Hennessy cognac and the Tiffany jeweler, posted sales of 20.69 billion euros, in line with expectations. analysts.

On a reported basis, group sales fell 2%, largely due to currency effects.

This result contrasts with the start of 2023, when quarterly sales were boosted by the lifting of COVID-19 restrictions in LVMH’s key market in mainland China. This year, the company is navigating concerns about a prolonged global slowdown, which has sent luxury company stocks tumbling over the past year.

LVMH is the second European company listed on the stock exchange and the first manufacturer of luxury goods to publish quarterly results, which sets the tone, in a context marked by growing concerns about demand in China, the world’s second largest economy.

Last month, Gucci owner Kering warned that its first-quarter sales would fall 10% year-on-year, with sharp declines in Asia, casting a chill over the sector’s outlook.

However, LVMH’s chief financial officer, Jean-Jacques Guiony, told reporters he was “quite happy” with demand from Chinese buyers.

He indicated that Chinese purchases of Louis Vuitton products had increased by around 10%, including a growing proportion outside mainland China with the resumption of tourist travel, particularly to Japan and, to a lesser extent, China. Europe.

In total, sales of LVMH’s fashion and leather goods division, which includes Louis Vuitton and Dior, rose 2%, in line with expectations. However, they mark a slowdown, after an increase of 9% year-on-year in the previous quarter.

LVMH shares have been volatile since the start of the luxury sector slowdown and have fallen 11% over the past year.

(Report by Mimosa Spencer and Dominique Patton, by Gaëlle Sheehan)

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