Lvmh sees slight luxury gain, but investor optimism remains elusive
LVMH, the titan of the luxury sector, delivered a first-quarter sales figure of €19.12 billion – a modest 1% organic increase – signaling a tentative recovery, but failing to ignite significant investor enthusiasm.
Fashion & leather goods hit a wall
Despite a slight improvement over the final quarter of 2025, when divisional sales dipped 3%, the conglomerate’s core Fashion and leather goods business reported a disappointing 2% decline. Bernstein analyst Luca Solca 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.’
Dior's transition, regional shifts drive variance
Cécile Cabanis, the CFO, painted a nuanced picture. Louis Vuitton and Dior, remarkably intertwined in their performance, demonstrated resilience, with Louis Vuitton showing greater strength than the average division. Loro Piana and Rimowa continued their robust growth trajectory, while other brands lagged. The brand’s response to creativity, new product launches, store experiences, and enhanced conversion rates were cited as key drivers.
Middle east impact, shifting consumer behavior
The conflict in the Middle East cast a long shadow, impacting organic growth by approximately 1%. Demand plummeted between 30% and 70% in March, depending on the specific location, according to Cabanis. While Europe and the US saw modest gains – 3% and 7% respectively – boosted by strong Chinese New Year sales, the region’s performance remains fragile. Notably, local Chinese spending increased, alongside a gradual recovery in Chinese tourism.
Category highlights & strategic adjustments
Watches and jewelry bucked the trend, surging 7%, propelled by the exceptional performance of Tiffany’s and Bvlgari. Perfumes and cosmetics remained flat, with selective retailing – spearheaded by Sephora – seeing a 4% uplift. The wines and spirits division benefited from a strong start to the champagne season in Europe and boosted cognac sales driven by Chinese New Year celebrations. However, global Fashion sales for March were broadly flat, save for the impact of the ongoing conflict.
Looking ahead – kering, hermès, and moncler in the spotlight
With Kering and Hermès reporting earnings this week, and Moncler following soon after, investors will be keenly observing how these competitors are navigating the current economic climate. The market awaits further clarity on repatriation of wealth and the long-term impact of the Middle Eastern instability.