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When war breaks out in the Middle East, does LV’s sales suffer? LVMH’s first-quarter financial report reveals a harsh truth

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What does the war in the Middle East have to do with luxury goods?
You might have thought it didn’t matter before. But the first quarter financial report just released by LVMH Group tells you: it matters a lot.
On April 13th, LVMH announced its Q1 2026 results. Sales amounted to 19.12 billion euros, with organic growth of only 1%, falling short of the 2% expected by analysts.
Even more heart-wrenching is that the group’s Chief Financial Officer, Cécile Cabanis, directly stated: “If it weren’t for the impact of the conflict in the Middle East, global fashion sales in March would have been roughly flat.
This conflict directly caused a loss of about 1% in LVMH’s total organic revenue growth in the first quarter.
When war breaks out in the Middle East, does LV’s sales suffer? LVMH’s first-quarter financial report reveals a harsh truth插图

PART 01

The Middle East accounts for 6% of LVMH’s sales, and local demand plummeted by 30% to 70% in March
Many people don’t know that the Middle East has been a “hidden growth point” for the luxury goods industry in recent years. Places like Dubai and Doha are not only shopping paradises for the rich but also hubs for long-distance travel around the world.
But once conflict arises, everything falls apart.
Cabanis revealed that the Middle East accounts for 6% of LVMH’s sales, with a higher proportion in the fashion and leather goods sector. Throughout March, consumer demand for local brands fell by 30% to 70%.
The specific decrease depends on the mall and business type of the brand. But no matter what, it’s a cliff-like drop.
What’s more troublesome is that this lost demand has not been “picked up” by other regions. The United States grew by 3%, Asia (excluding Japan) grew by 7%, while Europe and Japan actually fell by 3% respectively.
In other words: When the Middle East is at war, the whole world pays the bill.

PART 02

The fashion and leather goods division declined by 2%, but it was better than last year
Looking at specific divisions: LVMH’s core fashion and leather goods division saw sales decline by 2% to €9.25 billion.
Doesn’t sound optimistic? But compared to a 3% decline in the fourth quarter of 2025, it’s actually improving.

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The CFO specifically mentioned several brands:
  • Louis Vuitton: More resilient than the department average
  • Dior: Significant improvement compared to previous quarters
  • Loro Piana: Still maintaining double-digit growth
  • Rimowa: Also better than average
  • The remaining brands are below the department average
It is worth mentioning that brands such as Dior, Fendi, Celine, Loewe, and Givenchy have all changed their creative directors and are undergoing a “comprehensive creative renewal”. Jonathan Anderson’s first Dior collection has already arrived in stores in the first quarter, and more products (including bags and shoes) will be gradually added to shelves in the second quarter.
The CFO said that customer feedback on creativity, product novelty, stores, and experiences has been positive. However, the conflicts in the Middle East have diminished the effectiveness of these efforts.

PART 03

China Market: Long-awaited Good News
Amidst a gloomy atmosphere, there is a bright spot: China.
Sales in Asia (excluding Japan) increased by 7%, exceeding expectations. The CFO stated that this was the best quarterly performance in the region since 2023.
The favorable performance during the Chinese Lunar New Year, coupled with increased local consumption, finally shows signs of recovery in this key market.
UBS analysts also believe that demand in China is gradually improving, which is an encouraging signal.
For the entire luxury goods industry, the recovery of the Chinese market may be the biggest variable in 2026.

PART 04

Other Divisions: Jewelry Strong, Sephora Recovering
Apart from fashion leather goods, the performance of other divisions is uneven:
  • Watches and Jewelry: Growth of 7%, Tiffany performs “excellently”, Bvlgari “grows strongly”
  • Select Retail (including Sephora): Growth of 4%, initial results of repositioning in the Chinese market
  • Perfume and Beauty: Flat
  • Wine and Spirits: Organic Growth of 5%, Champagne performs strongly in Europe

PART 05

In the end
LVMH’s financial report is like a mirror.
It reflects the current real situation of the luxury goods industry: it’s not that the brands are failing or the products are unwanted, but that there are too many “black swans”.
Conflicts in the Middle East, inflationary pressures, global economic uncertainties… each of these is a sword hanging over our heads.
But LVMH’s chief financial officer said something worth remembering:
“Wealth has not evaporated. “
The money of the rich is still there, they just temporarily dare not spend, do not want to spend, or find it inconvenient to spend. Once the situation stabilizes, demand may rebound at any time.
For investors, now is not the time to panic, but to wait and see.
For ordinary people, this story tells us a truth: world peace is really related to everyone’s wallet.
未经允许不得转载：Galan Leather- Guangzhou Galan Leather Co., Ltd » When war breaks out in the Middle East, does LV’s sales suffer? LVMH’s first-quarter financial report reveals a harsh truth
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