LVMH sales disappoint as Middle East war crimps Dior demand
There are signs that the more exclusive brands are holding up better during the slump
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[PARIS] Sales at LVMH’s biggest division fell at the start of this year as the war in the Middle East crimped demand for Louis Vuitton and Dior products.
Organic revenue at the key fashion and leather goods unit dropped by 2 per cent in the first quarter, LVMH Moet Hennessy Louis Vuitton said on Monday (Apr 13), worse than the 0.05 per cent decline expected by analysts. Overall, group organic sales rose by 1 per cent, trailing estimates.
Hopes early this year that the luxury industry was poised to emerge from an extended slump withered with the start of the war in the Middle East, which reduced demand in the shopping hub of Dubai and elsewhere in the region and darkened the economic outlook globally.
LVMH’s business in the region, which represents around 6 per cent of total sales, suffered after a “very positive start to the year”, the Paris-based company said. The war reduced group organic growth by about one percentage point for the quarter, it said.
The Middle East is “quite a profitable” market for LVMH and demand there is still “very much down”, chief financial officer Cecile Cabanis told analysts in a call. Had it not been for the war, performance of the fashion and leather goods unit would have been “flattish” during the quarter instead of negative, she added.
LVMH’s American depositary receipts fell as much as 6 per cent in New York after the announcement. The company’s shares had their worst start to a year on record in the first quarter of 2026, falling by 28 per cent. Because of its size and the range of its businesses, LVMH is closely watched as a luxury industry bellwether.
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While Europe and Japan performed poorly in the quarter, the US and the region that includes China did surprisingly well, with organic revenue rising 3 per cent and 7 per cent respectively, ahead of estimates. China in particular showed strength during the New Year shopping season, and trends at makeup retailer Sephora improved, LVMH added. Europe suffered from lower tourism flows to the region.
There are signs that the more exclusive brands are holding up better during the slump. LVMH’s Loro Piana, which caters to the wealthiest, grew by double digits in the first quarter. Similarly, Brunello Cucinelli, the manufacturer of high-end cashmere clothes, posted resilient quarterly sales last week.
While Christian Dior Couture is seeing a “good start” for the first line under the creative direction of Jonathan Anderson, who took over last year, Cabanis added that she expects the environment to remain “highly volatile” in the coming months overall. BLOOMBERG
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