US luxury spending saw a 12% decline in March. However, the global luxury landscape has shown more fluctuating trends. Luxury conglomerate LVMH (MC.PA), the parent company of brands like Louis Vuitton and Dior, highlighted strong performance in other regions, notably the Middle East and Europe.

Yahoo Finance's Madison Mills breaks down the details.

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This post was written by Angel Smith

Video Transcript

BRAD SMITH: We're digging into the experience economy and the correlation to luxury spending. This is all tied to tourism. A new note from Bank of America says European luxury tourism spending will be a tailwind in Q1. Yahoo Finance's Madison Mills is here at the desk with me. There's a few big themes to break down, and even some fresh earnings results that's come out from LVMH that we can tie this all into. What did you see in this report?

MADISON MILLS: That is exactly right, Brad. It's really interesting seeing what mirrored the Bank of America report from the LVMH earnings, and what kind of bifurcated. So we're going to dig into it here.

This Bank of America print telling us that US luxury spending was down 12% in March. That's a pretty big drop off there, particularly when you look at the difference in terms of what we are seeing in Europe where luxury spending has really reared back and-- sawed back, rather, because of the amount of consumer spending that we're seeing due to travel. That's a big tailwind for some of these companies.

Now having said that, different consumers, different story when it comes to the spending picture abroad here. We have Chinese consumer spending in Europe was up a whopping 179% year-over-year. At the end of 2019, it was down 58%. So we've seen a huge change there.

Also, spending by Middle Eastern consumers was up 12% year-over-year. And that is exactly mirroring what we saw from LVMH earnings saying that they had growth that was particularly strong in Europe and the Middle East. Bank of America noting that it's going to be really critical for these well-known brands, the LVMHs of the world's, the Hermes's of the world's, to rely on being kind of market leaders as they call them, and have that high brand desirability that's favored amongst consumers who are a little bit uncertain. They talk about the headwinds that Chinese consumers in particular are facing.

And we've heard this from a lot of different brands as well. This isn't just about the luxury space, right? We've heard that China's iPhones-- iPhone sales coming out of China are down as consumers there are kind of pushing towards local brands. And so, that is something that's weighing not just on those consumer brands, but more of the luxury brands as well.