image: Louis Vuitton

image: Louis Vuitton

LVMH Moët Hennessy Louis Vuitton reported first-quarter revenue on Monday, which fell below analysts’ estimates as sales of fashion and leather goods slowed following terror attacks in Europe. One key takeaway: while fashion and leather-goods sales were unchanged (missing analysts’ estimate for 2.5 percent growth) – sales in the group’s Wine & Spirits and Perfumes & Cosmetics divisions are up, suggesting that consumers are drinking more and opting for cosmetics, as opposed to garments and accessories. 

The Paris-based luxury conglomerate, which owns Louis Vuitton, Givenchy, Celine, and Marc Jacobs, among other fashion and non-fashion sector brands, stated that sales gained 3 percent, excluding currency swings and acquisitions. That was below the 4.1 percent median estimate of 20 analysts. In Perfumes & Cosmetics, organic revenue growth was 9% in the first quarter of 2016. In Perfumes & Cosmetics, organic revenue growth was 9% in the first quarter.

Luxury-goods makers face another difficult year. Terror attacks in Paris and Brussels and new biometric visa requirements are weighing on European sales. The strong dollar and weakening consumer sentiment are hurting luxury spending in the U.S. Collapsing demand in Hong Kong and China, meanwhile, has led companies, including LVMH, to close stores and slow expansion. LVMH said its performance in Asia was “varied,” while France was hurt by falling tourism.

Total revenue for the period rose 4 percent to 8.62 billion euros ($9.8 billion). Analysts predicted 8.73 billion euros.