Louis Vuitton Owner Logs Weak Sales as Middle East War Takes Toll — 2nd Update

By Andrea Figueras

LVMH Moet Hennessy Louis Vuitton posted weak sales for the first quarter as the war in the Middle East held back growth and weighed on hopes of a rebound in demand for high-end goods.

The French group, regarded as a pacesetter for the industry, on Monday reported first-quarter revenue of 19.12 billion euros, equivalent to $22.42 billion. The figure marked a 6% decline in reported terms from a year earlier, but a 1% increase on an organic basis.

The organic growth rate--closely watched by investors and analysts--was unchanged from the fourth quarter, which comprised the key shopping Christmas season. Revenue in the January-through-March period was below estimates of 19.49 billion euros, according to Visible Alpha.

The luxury titan, led by French billionaire Bernard Arnault, said the geopolitical and economic environment had been disrupted, an effect that was particularly amplified by the conflict in the Middle East. The group said the Iran war had a negative impact of around 1% on organic growth for the quarter.

LVMH's fashion and leather goods business--its main sales and profit driver that houses labels such as Dior and Louis Vuitton--booked revenue of 9.25 billion euros, representing a 2% on-year organic decline. The result also fell short of analysts' forecasts of 9.46 billion euros.

Luxury brands in the past few years have been grappling with sluggish sales, trade disputes and a more unpredictable geopolitical landscape. After a years-long slump in demand for high-end accessories and haute couture, they were banking on a recovery this year, helped by better trends in two of its key markets, the U.S. and China, where LVMH saw improving trends during the quarter.

Those hopes began to dwindle in late February as the geopolitical picture soured due to the war in the Middle East. Analysts warned that the conflict could weigh on demand in the Persian Gulf and on tourism spend from Middle East consumers in Europe.

LVMH's Chief Financial Officer Cecile Cabanis said during the earnings call that the company was working on measures to mitigate the hit from the war. Still, the CFO noted that most of the group's businesses showed good progress during the quarter.

Aiming to rekindle well-heeled shoppers' appetite for pricey goods, a number of companies recently made changes to their creative teams. LVMH itself shifted the creative direction of some of its fashion houses, including signature brand Dior, as well as others such as Celine, Loewe, and Fendi. Such changes may take longer than expected to become apparent as new designs often take time to reach store shelves, analysts said.

The company said that the first designs by Jonathan Anderson, who holds the top creative job at Dior, were off to a very good start across regions. "Consumers are responding well to newness," Cabanis said, adding that the brand's performance improved compared with previous quarters.

Despite the wider industry slowdown, some luxury groups have managed to weather the storm better than others. Last week, Italian high-end fashion group Brunello Cucinelli reported an acceleration in sales in the first months of the year. Hermes, the maker of Birkin and Kelly bags, is scheduled to report first-quarter figures on Wednesday.

These companies cater to the wealthiest consumers, who have continued to purchase luxuries regardless of the economic environment, a factor that has put pressure on the less well-off.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

April 13, 2026 14:03 ET (18:03 GMT)