LVMH Faces Sluggish Start: Sector Slowdown Challenges Luxury Giant

LVMH reported a 3% drop in first-quarter sales, missing expectations amid economic uncertainties. The company's fashion and leather goods division saw a 5% decline, driven by disappointing performance at Dior. With U.S. recession fears and China's economic outlook remaining unstable, the luxury sector braces for a prolonged slump.

LVMH, the world's leading luxury group, has reported a 3% drop in sales for the first quarter, significantly missing market expectations. This comes amidst growing economic uncertainties causing shoppers to hold back on high-end purchases, confirming a slowdown in the luxury sector.

The French conglomerate, representing prestigious brands such as Louis Vuitton, Dior, and Hennessy, has faced a challenging start to the year. European luxury firms had hoped for a boost from affluent American consumers, but fears of a U.S. recession following recent tariff announcements are dimming those prospects.

Particularly troubling is the 5% decline in the fashion and leather goods division, mainly due to Dior's underperformance. The sector must now navigate potential tariff impacts, although LVMH expresses cautious optimism amidst current geopolitical and economic disruptions.

(With inputs from agencies.)