French luxury fashion house LVMH Moet Hennessy Louis Vuitton has delivered a resilient performance in the first quarter (Q1) of 2026, navigating a complex global environment shaped by geopolitical tensions and economic uncertainty. Despite disruptions linked to the Middle East conflict, the group maintained steady momentum.

The group has reported revenue of €19.1 billion (~$22.54 billion) in Q1, a decline of 6 per cent year-on-year (YoY) due to adverse currency effects of 7 per cent. It delivered modest organic growth of 1 per cent, with the conflict alone weighing on growth by around 1 per cent during the quarter.

France’s LVMH has reported a resilient Q1 2026 performance despite geopolitical tensions and Middle East disruptions.
Revenue declined 6 per cent YoY due to currency effects, while organic growth remained marginal.
Strong demand in the US and Asia supported performance, though Fashion & Leather Goods saw a dip.
Sephora drove retail growth.
The group remains optimistic, backed by global diversification.

Regionally, performance remained mixed but broadly stable. The US recorded a strong start to the year, reflecting steady consumer demand. Europe and Japan benefited from resilient local consumption, which helped offset weaker tourist flows. Asia, excluding Japan, posted robust growth, confirming the recovery trend that began in the second half of 2025. However, the Middle East experienced a slowdown in March after a strong start, as escalating tensions disrupted consumer activity and tourism, LVMH said in a press release.

Across business segments, Fashion & Leather Goods, the group’s largest revenue contributor, declined by 2 per cent on an organic basis, impacted by the Middle East disruption. Nevertheless, leading maisons continued to reinforce brand desirability and innovation. Louis Vuitton marked the 130^th anniversary of its Monogram canvas with global activations and new flagship openings, while Dior saw strong consumer response to new collections, including designs by Jonathan Anderson. Loro Piana maintained excellent performance, and creative transitions at Celine, Loewe, Givenchy and Fendi signalled ongoing portfolio renewal.

Selective Retailing recorded organic growth of 4 per cent, driven primarily by Sephora’s continued global expansion and market share gains. The brand strengthened its presence, particularly in the United Kingdom, while DFS undertook strategic restructuring, including agreements to divest certain operations in Greater China and US airport locations. Le Bon Marché maintained its differentiation strategy through curated events and retail experiences.

Despite persistent macroeconomic uncertainty and geopolitical disruptions, LVMH remains cautiously optimistic. The group continues to focus on innovation, brand development and selective distribution, leveraging its diversified portfolio and balanced geographic exposure. Backed by strong creative momentum and sustained investment, LVMH aims to reinforce its global leadership in luxury goods throughout 2026, added the release.

Fibre2Fashion News Desk (SG)

Assuming that the Iran war will have limited duration, intensity and scope, and the disruptions will fade by mid-2026, global growth is projected to be 3.1 per cent in 2026 and 3.2 per cent in 2027, slower than its recent pace of about 3.4 per cent in 2024-25, according to the International Monetary Fund’s (IMF) latest World Economic Outlook (WEO).

It projected that global growth will stabilise at this level in the medium term, below its historical (2000–19) average of 3.7 per cent.

Assuming that the Iran war will have limited duration, intensity and scope, and the disruptions will fade by mid-2026, global growth is projected to be 3.1 per cent in 2026 and 3.2 per cent in 2027, according to the IMF’s World Economic Outlook.
Global headline inflation is expected to rise to 4.4 per cent in 2026 and decline to 3.7 per cent in 2027, marking upward revisions for both years.

The forecast for 2026 is revised downward by 0.2 percentage point and that for 2027 is unchanged, compared with those in the January 2026 WEO Update.

Global headline inflation is expected to increase to 4.4 per cent in 2026 and decline to 3.7 per cent in 2027, marking upward revisions for both years.

Under an adverse scenario with larger and more persistent increases in energy prices, global growth would slow further to 2.5 per cent in 2026, and inflation would reach 5.4 per cent.

Under a more severe scenario in which there is more damage to energy infrastructure in the conflict region, the impact would be even larger: Global growth would be cut to only about 2 per cent in 2026, while headline inflation would be just above 6 per cent by 2027. The impact on emerging market and developing economies would be almost twice that on advanced economies under such a scenario.

Downside risks dominate the outlook. A longer or broader conflict, worsening geopolitical fragmentation, a reassessment of expectations surrounding artificial intelligence (AI)-driven productivity, or renewed trade tensions could significantly weaken growth and destabilise financial markets.

Elevated public debt and eroding institutional credibility further heighten vulnerabilities. At the same time, activity could be lifted if productivity gains from AI materialise more rapidly or trade tensions ease on a sustained basis.

Fostering adaptability, maintaining credible policy frameworks, and reinforcing international cooperation are essential to navigating the current shock while preparing for future disruptions in an increasingly uncertain global environment, the report noted.

Scaling up of defence spending prompted by a rise in geopolitical tensions could boost economic activity in the short term, but also bring about inflationary pressures, weaken fiscal and external sustainability, and risk crowding out social spending, which could in turn ignite discontent and social unrest.

The report recommended that governments rebuild buffers for future shocks by mobilising revenues, reprioritising expenditures, improving spending efficiency and managing windfalls prudently.

A second priority is addressing domestic imbalances, especially when doing so also helps reduce excessive external imbalances. Actions aimed at removing domestic distortions—through fiscal, structural, and industrial policies—can simultaneously narrow external imbalances while enhancing global output, added the report.

Fibre2Fashion News Desk (DS)