A Louis Vuitton bag is displayed at the LVMH Moet Hennessy Louis Vuitton stand during the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center in Paris, France, June 12, 2025.
Benoît Tessier | Reuters
Luxury conglomerate and industry indicator LVMH reported lower-than-expected quarterly sales on Monday, as the industry begins to decipher the fallout from the Middle East war and its impact on inventories.
Organic sales rose 1% in the first quarter, but analysts surveyed by FactSet expected 1.5% growth for the March quarter.
The conflict in the Middle East had a negative impact of 1% on organic growth for the quarter, LVMH said in a press release.
“LVMH has maintained its strong innovation dynamic and demonstrated good resilience in a geopolitical and economic environment which remains disrupted, amplified by the conflict in the Middle East,” declared the company, also highlighting a good start to the year in the United States.
The French company’s U.S.-listed shares fell more than 4% on Monday.
Analysts generally expect growth to accelerate significantly in coming quarters as LVMH and others continue to try to reinvent themselves and win back customers. Many buyers turned their backs on brands after a luxury boom that ended in 2022, which was marked by significant price hikes and strategic decisions that alienated some of their customer base.
This comes as the sector has shown some signs of a a long-awaited recovery after years of recession caused by weak demand from Chinese consumers, once one of the sector’s main growth engines.
LVMH’s fashion and leather goods division, its largest unit including brands like Louis Vuitton, Dior and Fendi, fell 2 percent to 9.2 billion euros ($10.8 billion) at constant exchange rates in the quarter. Total revenue was 19.1 billion euros, slightly below expectations.
Watches and jewelry grew 7% in the quarter on an organic basis, driven by Tiffany’s strong performance, and the company’s wine and spirits division grew 5%.
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Luxury values have fallen since the outbreak of war in Iran in late February.
In published data, LVMH sales were down 6% over the quarter, impacted by unfavorable exchange rates.
Local demand helped partly offset the drop in tourism spending, LVMH said. Asia excluding Japan experienced strong growth, “confirming the improving trends observed from the second half of 2025,” the company adds.
In 2025, the company’s organic sales
