People aren't thirsty for champagne and luxury bags—and that's jeopardizing LVMH's sales growth among high-end shoppers

The world's biggest luxury company, Bernard Arnault's LVMH, marched into 2024 with the kind of optimism that instilled much-needed confidence into the rest of the industry after rumblings of a slowdown. The Paris-based LVMH, which owns brands like Christian Dior, Tiffany & Co., and Loro Piana, saw a slowdown in sales growth as shoppers continue to contemplate their spending on high-end goods. The rest of Asia pulled back from high-end spending significantly in the first quarter, compared to a year ago. 2024's first-quarter comparison to the same time a year ago, when the appetite for demand looked different, is the reason for a stark difference. "We are anniversarizing a pretty strong business last year in Q1 following at the end of the zero-COVID policy," Guiony said, adding that he was "Quite happy" with the overall growth of LVMH's business in its key Asian market. Analysts echoed the same, as demand from Chinese shoppers has been critical in shaping luxury brands' performance over the years. LVMH's results aren't "a surprise given the very difficult comparison base from last year, which showed 17% growth for the group and 18% for fashion and leather goods. The comparison base gets easier in the second half of the year," said Morningstar's senior equity analyst Jelena Sokolova in a Wednesday note.