PARIS: French luxury giant LVMH suffered a heavy impact from the Middle Eastern conflict, it said on Monday, as sales fell in the Gulf and many rich tourists from the region also stopped spending in Europe.
Global quarterly sales at the owner of brands including Louis Vuitton and Dior, Bulgari jewellery and Hennessy, rose by 1% when adjusted for currency swings, slightly below analyst estimates of a 1.5% rise, according to a Visible Alpha consensus.
But the military conflict between Iran and Israeli-U.S. forces led to a negative impact of around 1% on total group sales, even before accounting for indirect effects such as lower tourism elsewhere, LVMH said.
Reuters reported that mall sales in Dubai fell by as much as 50% since the start of the war. LVMH said mall traffic was down sharply, adding that while the region represents 6% of LVMH’s turnover, the impact on profit margins will likely be higher due to the region’s exceptional profitability.
The conflict also weighed on sales in Europe, which were down 3%, mainly due to the war and the strong euro, LVMH said.
