LVMH Q1 Shows Soft Patch
LVMH reported first-quarter revenue of €19.1bn, a roughly 6% decline on a reported basis with organic growth of about 1%, and executives said Middle East conflict and a strong euro disrupted an otherwise positive start to the year. (cnbc.com) (wwd.com) (investing.com)
LVMH’s first quarter showed growth, but only barely, as war in the Middle East and currency swings cut into demand. (lvmh.com) The French luxury group reported €19.1 billion in revenue for the three months ended March 31, with organic sales up 1% and reported sales down 6%. LVMH said exchange-rate moves cut reported growth by 7%, and CNBC reported analysts surveyed by FactSet had expected 1.5% organic growth. (lvmh.com) (cnbc.com) The biggest drag came from Fashion and Leather Goods, LVMH’s largest division, where organic sales fell 2% in the quarter. Watches and jewelry rose 7% organically, wines and spirits gained 5%, and selective retailing, which includes Sephora, grew 4%. (lvmh.com) (wwd.com) LVMH said the Middle East conflict reduced first-quarter organic growth by 1 percentage point. Chief Financial Officer Cécile Cabanis said on the analyst call that demand in the region deteriorated by 30% to 70% in March, depending on the mall and business line, and that the Middle East accounts for about 6% of group sales. (cnbc.com 1) (cnbc.com 2) That matters because the Middle East had become one of luxury’s few reliable growth markets after a long slowdown in China. CNBC reported Bernstein estimated the region was the fastest-growing luxury market in 2025, at 6% to 8% growth, even as China and Japan were shrinking. (cnbc.com) LVMH said the United States had a good start to 2026, Europe and Japan were supported by local demand, and Asia excluding Japan posted strong growth that extended an improvement that began in the second half of 2025. That regional mix suggests the company was recovering in several markets before the March disruption hit tourist spending and Middle East demand. (lvmh.com) Investors still treated the update as a setback for the sector’s hoped-for rebound. LVMH shares fell more than 2% on April 14, and Bernstein analyst Luca Solca said the luxury recovery party was “postponed,” according to CNBC. (cnbc.com) LVMH came into the quarter as a closely watched readout for the industry after reporting 2025 revenue of €80.8 billion and operating profit of €19.6 billion in January. Its brands include Louis Vuitton, Dior, Tiffany and Sephora, so its quarterly sales often shape expectations for rivals across fashion, jewelry and beauty. (lvmh.com) (cnbc.com) For now, LVMH is still growing, but on a thinner margin for error. A quarter that looked solid in the United States and improving in Asia ended up defined by a March shock in one region and a stronger euro across the group. (lvmh.com) (cnbc.com)
