Paris (France) (AFP) – Sales at the world’s leading luxury group, LVMH, fell six percent in the first quarter of the year as the war in the Middle East depressed business in the region. The company, best known for Louis Vuitton handbags, Dior fashion, Moet & Chandon champagne, and Tiffany jewellery, registered 19.1 billion euros ($22.4 billion) in sales from January through March.
On an organic basis — excluding exchange rate fluctuations and changes in the business — sales rose by one percent. “LVMH maintained its powerful innovative momentum and showed good resilience in a geopolitical and economic environment that remained disrupted, amplified by the conflict in the Middle East,” the company said in a statement. The company reported that the war launched by the United States and Israel on Iran “had a negative impact of around one percent on organic growth for the quarter,” but expressed hope that it would make up for lost sales once consumers return to shops.
LVMH’s chief financial officer, Cecile Cabanis, told analysts it is still unclear what the final impact of the war will be. “What we know is that wealth hasn’t evaporated,” she said. “There will probably be a moment where we see it return elsewhere and lessen the impact of the conflict if it continues,” she added.
The conflict, which saw Iran launch missile and drone strikes against its Gulf neighbours, severely affected air travel through the region, a key hub for long-haul flights between Europe and Asia, and disrupted the transport of oil and gas through the Strait of Hormuz. The Middle East region accounts for around six percent of LVMH’s sales. According to a recent study by analysts at equity research firm Bernstein, the Middle East was the top region for luxury groups last year, with six to eight percent organic growth, while other regions were more or less stable.
LVMH, which like other luxury groups has suffered in recent years from the slowdown in growth in China, evoked positive trends there as well as in the United States. “The Chinese segment has improved rather well, with a local Chinese clientele that registered solid growth in the first quarter,” said Cabanis. The spike in trade tensions between the world’s two biggest economies last year contributed to a five-percent slide in LVMH’s sales to 80.8 billion euros.
LVMH saw net profits fall 13 percent in 2025 to 10.9 billion euros, mostly due to an exceptional tax on large French companies. The fashion and leather goods segment, LVMH’s biggest, saw sales slide nine percent in the first quarter of 2026 from the same period last year. It was also the only product segment to contract on an organic basis.
© 2024 AFP
