Luxury sales slow
- Luxury groups reported weaker first-quarter sales as the Middle East conflict cut tourist flows and in-store traffic. - LVMH said the war trimmed at least 1% off Q1 sales, and Middle East footfall plunged roughly 70%. - Digital sales remain steadier, but travel-dependent, high-margin retail is showing clear vulnerability. (cnbc.com) (fibre2fashion.com)
Luxury demand weakened at the start of 2026 as fighting in the Middle East cut tourist shopping and emptied some of the industry’s busiest stores. (lvmh.com) (cnbc.com) LVMH said first-quarter revenue reached 19.1 billion euros, with organic sales up 1%, below the 1.5% growth analysts surveyed by FactSet had expected. The company said the Middle East conflict reduced quarterly organic growth by 1 percentage point. (lvmh.com) (cnbc.com) Bernard Arnault told shareholders in Paris on Thursday, April 23, that LVMH’s return to faster growth depends on how the Middle East crisis develops. He said the group saw footfall in the region fall by about 70%. (cnbc.com) (fibre2fashion.com) That drop hits luxury companies where they usually earn some of their richest margins: full-price boutiques in travel hubs such as Dubai and European shopping districts that depend on visiting customers. LVMH said the biggest drag in the quarter came from fashion and leather goods, where organic sales fell 2% to 9.25 billion euros. (cnbc.com) (bloomberg.com) The weakness is showing up beyond one company. Kering reported first-quarter revenue of 3.568 billion euros, flat on a comparable basis, and said retail revenue in the Middle East fell 11% after growth in the first two months of the quarter. (kering.com) (emarketer.com) Markets treated the updates as a sector warning. After Kering and Hermès reported results on April 15, Hermès shares fell 8.2% and Kering closed down 9.3%, while Burberry, Christian Dior and Moncler also ended lower that day. (cnbc.com) Online demand has held up better than store traffic. Similarweb data cited this week showed smaller declines online for LVMH brands, and in some categories and markets, digital traffic still grew even as physical retail traffic dropped sharply. (fibre2fashion.com) That split helps explain why some brands are holding up better than others. Moncler reported first-quarter revenue up 6% to 880.6 million euros, with Asia and direct-to-consumer sales offsetting weaker tourist shopping in Europe. (cnbc.com) (globalbankingandfinance.com) For now, the industry’s problem is less about whether wealthy customers still exist than where they are buying. As long as travel routes stay disrupted and store traffic stays thin, luxury groups remain exposed in the places where they usually sell best. (cnbc.com) (fibre2fashion.com)
