While the sales of the French luxury consumer company LVMH in the first quarter decreased due to the impact of the Iran war, the company’s shares fell by 2 percent.
LVMH, the first company among the leading luxury consumer companies to disclose its balance sheet, announced yesterday that the war in Iran reduced the group’s global sales by 1 percent. While the war reduced spending in cities in the Persian Gulf such as Dubai, travel from regional countries to Europe for shopping also decreased.
Sales at shopping malls, which typically account for about 6 percent of LVMH’s sales, are down 30 percent to 70 percent, said the company’s chief financial officer, Cecile Cabanis.
As LVMH prepares to report its profits in July, Cabanis said the impact of the war on profitability could be greater, noting that the Middle East is “a highly profitable market.”
Shares of LVMH have fallen 27 percent year-to-date as hopes that demand for luxury goods will recover faded.
Citi analyst Thomas Chauvet said that “the real uncertainty created by the conflict in the Middle East is seen in macro conditions, consumer confidence and global tourist movements.”
