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LVMH Sales Fall Short of Forecasts as Chinese Luxury Demand Weakens
At a glance
- LVMH reported Q3 revenue of €18.5 billion; nine-month sales were €57.1 billion.
- Organic sales growth slowed to 1% in Q3 from 3% in Q2, missing expectations.
- Fashion and leather goods saw a 5% organic sales decline, worse than analyst forecasts.
- Selective retailing (including Sephora) rose 8% organically; watches & jewellery and wines & spirits each gained 6%.
- Weaker demand in China amplified by a reputational dispute in the market is the main drag on growth.
- Analysts view the weakness as cyclical but warn of possible further cuts to profit forecasts for H2 2026 and 2027.
- LVMHs share price has fallen nearly 40% year-to-date; L'Oréal became France's most valuable listed company in September.
Results and regional trends
LVMH, the world's largest luxury goods group, reported third-quarter revenue of €18.5 billion for the three months to the end of September, a 1.2% increase year-on-year. That followed a 0.1% rise in the second quarter and a 5.9% decline in the first. For the first nine months of the year, the group's sales totaled €57.1 billion, with organic growth which strips out currency effects and portfolio changes up 2% year-to-date.
Despite the topline increase, organic sales growth disappointed investors and analysts: it slowed to 1% in Q3 from 3% in Q2. LVMH said sales were robust in the United States, Europe and Japan, but the group faced a weaker environment in China that dented demand for fashion and leather goods.
Division performance and market impact
The fashion and leather goods division the group's largest and home to marquee brands such as Louis Vuitton, Dior and Celine posted a 5% drop in organic sales. That decline was steeper than the roughly 2% fall Deutsche Bank analysts had expected, and marked a setback after the division had delivered its first organic sales gain in two years in the previous quarter.
Other parts of LVMH's portfolio showed resilience: selective retailing, which includes the Sephora cosmetics and perfume chain, achieved an 8% rise in organic sales, while watches and jewellery and wines and spirits both recorded 6% organic growth. LVMH highlighted the benefit of a diversified business mix in providing resilience amid geopolitical and economic uncertainty.
Customer sentiment in China also faced reputational headwinds after Louis Vuitton sued a local tea company, Molly Tea, over logo copying. Although the luxury house won the case, the dispute sparked social media backlash and calls for a boycott a factor LVMH said contributed to the weakness in the market.
Deutsche Bank analysts warned the shortfall in organic growth could lead to further downward revisions to earnings forecasts for the second half of 2026 and into 2027. They described the weakness as cyclical rather than structural, noting that brand-level initiatives are starting to produce results but that recovery is taking longer given softer demand from Chinese consumers.
LVMH's share price has reflected investor concerns: the stock has fallen nearly 40% year-to-date. In September the cosmetics group L'Oréal overtook LVMH as France's most valuable listed company. On the day of the release, LVMH shares were down more than 1.6% at around 10:00 CEST in Paris.
Overall, LVMH's Q3 showed the limits of diversification when a central market like China cools. While other divisions are growing and the group's global footprint is a buffer, the performance of fashion and leather goods remains pivotal to restoring investor confidence and supporting the luxury group's earnings outlook.
