A shocker of a first-quarter update from Louis Vuitton Moet Hennessy (EPA:MC) saw its shares tank and other luxury names dragged lower too.
The world's largest luxury company, maker of Moët & Chandon champagne, Hennessy cognac and owner of Louis Vuitton and Christian Dior fashion houses, reported a 2% fall in revenue on a reported basis and 3% on an organic basis.
While analysts had forecast 2% growth for the quarter, spending in the US and Japan on beauty products and drinks declined, while sales in China stayed weak.
"In a disrupted geopolitical and economic environment, LVMH remains both vigilant and confident at the start of the year," the Paris-heaquartered group said.
Wines & Spirits sales fell 9%, with cognac sales hit by lower demand in China and the US. Sales of Fashion & Leather Goods were down 5%, while Perfumes & Cosmetics, Watches & Jewelry, and Selective Retailing, including Sephora, saw stable revenue.
Results came out after hours on Monday evening, and in early trading on Tuesday, LVMH shares fell 8%, while separately listed Christian Dior shares fell 7.1%. Elsewhere in Paris, Kering SA (EPA:KER) and Richemont dropped more than 3%, while in London, Burberry Group PLC (LSE:BRBY) dropped 4.1%.
Analysts at Deutsche Bank said it was now apparent that a strong fourth quarter for LVMH "was the anomaly" as F&L reverted back to the decline seen in the third quarter.
The results was "below the low end of any investor conversations we have had", they added, saying it "will provide negative readacross for the luxury peers".