LVMH Moët Hennessy Louis Vuitton SE (EU:MC) saw its shares fall more than 2% on Tuesday after reporting first-quarter revenue that came in below expectations, as tensions in the Middle East weighed on key divisions such as fashion and cosmetics, offsetting stronger performances in watches and spirits.
The Paris-listed luxury group recorded organic revenue growth of 1% for the three months to March, missing analyst forecasts of 1.95%. Total revenue reached €19.1 billion, also below the €19.6 billion consensus estimate.
Its core Fashion & Leather Goods division, the group’s largest profit driver, declined 2% on an organic basis to €9.25 billion, falling short of expectations for broadly stable performance.
LVMH indicated that the Middle East conflict reduced group growth by around one percentage point during the quarter, with demand weakening notably in March.
“The trend in the US and with the American clientele is quite homogeneous on the quarter… we didn’t see any specific disruption linked to the start of the conflict,” said Jean-Jacques Guiony, who added that European consumers had remained “quite resilient.”
Among divisions, Watches & Jewelry stood out with 7% organic growth, outperforming the 4.2% consensus, supported by strong demand for Tiffany’s HardWear collection. Wines & Spirits also delivered a solid performance, rising 5% and beating expectations for a slight decline, helped by favourable timing of the Chinese New Year.
Regionally, Asia excluding Japan grew 7%, exceeding forecasts, while the United States posted modest growth of 3%. Europe lagged, with revenue declining 3%, performing worse than expected.
The Perfumes & Cosmetics division was flat on an organic basis, missing projections for nearly 2% growth, although Dior benefited from strong demand for foundation products and women’s fragrances.
Selective Retailing rose 4%, below the 6.2% consensus estimate. Sephora delivered solid like-for-like growth across most markets, while DFS continued to weigh on performance due to asset disposals in Greater China and reduced activity at U.S. airport concessions. Sephora also showed sequential improvement in China, which management described as its strongest quarterly performance since 2023, although overall conditions in the market remained weak.
Analysts at Jefferies, who rate LVMH as “hold” with a €510 price target, said the results highlighted the Middle East conflict as a significant headwind, particularly for fashion and Sephora due to their exposure to tourism-driven markets. They also noted that makeup and fragrance have been identified by management as key near-term growth areas.
“LVMH remains vigilant yet confident at the start of the year,” the company said.
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