LVMH’s fashion division returns to growth for first time in two years

LVMH reported second-quarter revenues of €19.52 billion on Monday, representing organic growth of 3%, as robust American spending helped the luxury conglomerate accelerate from a sluggish start to the year. The results mark a notable improvement from the 1% organic growth posted in the first quarter, when the ongoing conflict in Iran weighed heavily on demand across the Middle East and Gulf shopping hubs.lvmh+3

Fashion Division Breaks Losing Streak

The company's flagship Fashion and Leather Goods division, which houses Louis Vuitton and Dior, posted its first organic revenue increase in two years during the second quarter. The unit had declined 2% organically in the first quarter and suffered through much of 2025, when LVMH reported an 8% revenue decline for the full-year fashion segment. While the return to growth is symbolically important for the world's largest luxury group, the division's performance in recent quarters has consistently fallen below analyst expectations, with the Iran conflict singled out as a persistent drag on high-spending customers in the Gulf region.theindustry+3

Iran War Casts Long Shadow

The war in Iran has been a defining headwind for LVMH throughout 2026. During the first quarter, the company disclosed that the conflict reduced global organic growth by at least one percentage point, with mall traffic in the Middle East falling sharply as consumers pulled back. Reuters reported in April that LVMH's chief financial officer warned the disruption would persist into the second quarter.reuters+1

For the full first half, LVMH recorded revenue of approximately €38.6 billion, up from roughly €39.8 billion in the prior-year period on a reported basis but reflecting underlying organic improvement. The United States emerged as the group's strongest performing region, extending the 3% growth trajectory it established in the first quarter, while Europe and Japan continued to lag.vogue+2

Outlook Uncertain

LVMH shares have fallen more than 25% since the start of the year as investors grapple with geopolitical disruption, a strong euro, and uneven demand across regions. Analysts surveyed by Visible Alpha had forecast Q2 revenue of approximately €21.45 billion, suggesting the company's reported figure came in below expectations on a nominal basis despite the organic acceleration. The luxury sector now looks to the second half for signs of whether the US-driven momentum can offset continued pressure from the Middle East conflict.tradingsat+2