• Fashion/leather goods sales up 0.4% 
  • Q1 sales rose 6% to EUR6.9m
  • Strong growth in Asia and US

Luxury goods powerhouse LVMH Moët Hennessy Louis Vuitton has seen first-quarter sales growth slow at its fashion and leather goods division. 

The unit posted a 0.4% rise in sales to EUR2.4m (US$3.1m) from EUR2.4m the prior year - much slower than the 17% growth reported last year.

LVMH said Louis Vuitton and Céline continued to make progress, Fendi is continuing to expand its store network, anf other brands "continued to develop well".

Meanwhile, total sales rose 6% to EUR6.9m over the quarter, up from EUR6.6m last year, while organic sales were up 7%.

The company said growth was strong in Asia and the US, while Europe demonstrated "good resistance despite a challenging economic environment".

Looking forward, LVMH said: "In an economic environment which remains uncertain in Europe, LVMH will continue to focus its efforts on developing its brands, will maintain a strict control over costs and will target its investments on the quality, the excellence and the innovation of its products and their distribution."

Commenting on the results, Bank of America Merrill Lynch analyst Mark Wallis said sales growth at the leather goods and fashion unit was 1% below its expectations.

"Louis Vuitton decelerated 2 percentage points sequentially from 5% organic revenue growth in the fourth quarter to 3% in the first quarter. 

"The bears will argue that the decline of leather goods and fashion in the mix is margin dilutive, but we already expect the division to decline 100 basis percentage points as a percentage of sales this year (-20 basis points impact on EBIT margin) and revenue momentum should pick up as the group anniversaries easier comparison basis," Wallis added.