A Louis Vuitton bag on display at the LVMH Moët Hennessy Louis Vuitton stand during the Viva Technology conference dedicated to innovation and startups held at the Porte de Versailles exhibition center on June 12, 2025 in Paris, France.
Benoît Tessier | Reuters
Luxury conglomerates and industry standard-bearers LVMH Quarterly revenue reported Monday fell short of expectations as the sector begins to unravel the fallout from the Middle East wars and its impact on stock prices.
Organic sales rose 1% in the first quarter, but analysts surveyed by FactSet had expected growth to be 1.5% in the March quarter.
LVMH said in a statement that the Middle East conflict had a 1% negative impact on organic growth in the quarter.
“LVMH maintained its strong innovative momentum and demonstrated great resilience in a geopolitical and economic environment exacerbated and disrupted by the Middle East conflict,” the company said, noting that the year has also gotten off to a strong start in the United States.
The French company’s U.S.-listed shares fell more than 4% on Monday.
Analysts widely expect growth to accelerate significantly in the coming quarters as LVMH and others continue to reinvent themselves and win back customers. Many shoppers turned their backs on brands after the luxury goods boom, which ended in 2022, saw significant price hikes and strategic decisions that alienated some customers.
This comes as the sector shows signs of a long-awaited recovery after years of stagnation prompted by weak demand from Chinese consumers, which was once one of the sector’s main growth drivers.
LVMH’s largest division, Fashion and Leather Goods, which includes brands such as Louis Vuitton, Dior and Fendi, fell 2% to 9.2 billion euros ($10.8 billion) in constant currencies in the quarter. Total revenue came in at 19.1 billion euros, slightly below expectations.
Watches and jewelry grew 7% organically in the quarter, driven by Tiffany’s strong performance, while the company’s wine and spirits division grew 5%.
Luxury stocks have been in decline since the Iran war broke out in late February.
On a reported basis, LVMH’s sales declined 6% in the quarter due to unfavorable exchange rates.
LVMH said local demand partially offset the decline in tourism spending. Strong growth was seen in Asia ex-Japan, “confirming the improvement in trends observed from the second half of 2025,” the company added.
The company’s organic sales declined by 1% in 2025, with growth concentrated in the second half of the year.
The recovery of the Chinese economy will continue to be a top concern for investors in 2026, as will the impact of the Middle East war. The Middle East region has been one of the few bright spots for the sector as growth elsewhere has slowed.
Although the region accounts for a relatively small share of the total sales of most high-end luxury companies (typically in the mid-single digits), stock prices have fallen significantly since the United States and Israel first attacked Iran on February 28th. Global markets remain unstable due to the unfolding energy crisis caused by the de facto closure of the Strait of Hormuz.
Beyond macroeconomic uncertainty, key risks for LVMH for the rest of 2026 include its ability to maintain brand momentum around Louis Vuitton while gradually improving Dior, Givenchy and Celine, Barclays analyst Carol Maggio said in a note to clients in late March.
Majo added that stabilizing the wine and spirits sector, investing in cosmetics and maintaining Sephora’s solid performance will also be key, and he expects organic growth to return to 5% in the second quarter.
“Increased global uncertainty is causing great anxiety, especially among investors who were hoping for a rebound in luxury goods demand this year,” UBS analyst Zussanna Pusch said in late March.
Pusch said the consumer sector typically underperforms during oil and energy-related shocks, and rising geopolitical uncertainty is likely to weigh on sentiment in the near term.
Still, she added, there are still no signs of demand slowing down, especially in Asia. “We believe that even modest gains in the first quarter could be disproportionately rewarded against a backdrop of very negative market sentiment and weak valuations.”
small luxury cashmere pia Brunello Cucinelli, the first major luxury brand to report financial results for the quarter, saw first-quarter revenue rise 14% in constant currencies.
The Italian company beat expectations last week, sending its stock price higher. In Asia, particularly China, the company said, “further improvement was seen compared to the already positive trends in the fourth quarter of 2025, confirming the growing recognition of the brand across the region and its position in the premium segment of luxury goods.”
peer hermes And the owner of Gucci kering A financial report is also scheduled for this week.
