Lvmh sees slight luxury gain, but investor optimism remains elusive
LVMH, the titan of the luxury sector, reported a modest 1% organic sales increase to €19.12 billion for the first quarter of 2026, a figure that fails to ignite investor enthusiasm.
Fashion & leather goods faces headwinds
Despite a marginal improvement over the previous fourth quarter’s 3% decline, the conglomerate’s core Fashion and leather goods business experienced a 2% contraction, falling short of consensus forecasts predicting a 0.9% drop. Luca Solca, a senior analyst at Bernstein, succinctly captured the sentiment: ‘LVMH has reported a better first-quarter update than it closed last year in Q4 2025. But this is likely not enough to convince investors to step off the fence.’
Brand-level resilience amidst uncertainty
Cécile Cabanis, LVMH’s CFO, painted a nuanced picture, highlighting Louis Vuitton and Dior’s relative strength. Louis Vuitton demonstrated continued resilience, outperforming the divisional average, while Dior recovered significantly from previous quarters. Loro Piana and Rimowa also continued their strong growth trajectories, though other brands lagged. The shift in creative direction for Jonathan Anderson at Dior, initially impacting ready-to-wear collections in Q1, is expected to gradually introduce the full range – including bags and shoes – over the coming months.
Geopolitical shifts impact sales
The war in the Middle East exerted a notable drag on performance, reducing organic growth by approximately 1% in Q1. Demand in the region, accounting for 6% of group sales and slightly more for Fashion and leather goods, plummeted between 30% and 70% in March, depending on mall activity. Cabanis noted that while wealth hadn’t vanished, repatriation of funds was yet to materialize, suggesting a potential shift in spending patterns as the conflict persists. European sales dipped 3%, mirroring a similar decline in Japan, while the US saw a modest 3% increase, boosted by strong Chinese New Year performance.
Regional divergences offer a glimmer
Remarkably, Asia ex-China – specifically, the ‘rest of Asia’ – delivered a robust 7% growth, the region’s best performance since 2023, driven by increased local Chinese spending and the ongoing recovery of Chinese tourism. Watch and jewelry sales surged by 7%, propelled by strong performances from Tiffany’s and Bvlgari. Perfumes and cosmetics remained flat, while selective retailing, spearheaded by Sephora, rose 4%. The wines and spirits division reported a 5% increase, fueled by celebratory sales during Chinese New Year, particularly in Europe, alongside strong champagne demand. Despite a volatile environment, Cabanis emphasized the positive response to brand innovation and customer experiences.
Cautious optimism for the near term
Looking ahead, LVMH remains cautiously optimistic, citing continued positive engagement with its initiatives. The group will be closely watched this week by investors as Kering and Hermès release their first-quarter results, followed by Moncler, Prada, Burberry, and Richemont.