Bags and rags not the best as LVMH takes a hit

By the Editorial Team · Wednesday, October 14, 2026

LVMH reported a 5 percent decline in sales for its fashion and leather goods division in the third quarter, driven largely by weak demand in China and missed analyst expectations. Despite challenges in key regions and legal disputes affecting brand reputation, strong growth in the U.S. market and other segments helped the group achieve a modest overall revenue increase of 1 percent.

LVMH, the world’s largest luxury goods group, reported a sharper-than-expected decline in sales within its core fashion and leather goods division during the third quarter, signaling ongoing challenges in the Chinese market. The segment, which includes Louis Vuitton and Dior and accounts for the majority of LVMH’s revenue, recorded sales of just under €8.25 billion ($13.2 billion), representing a 5 percent organic decline and falling short of analysts’ projections of €8.4 billion.

Overall, LVMH’s total third-quarter revenue rose by 1 percent to €18.5 billion, slightly below market expectations. The results reflect pressures from geopolitical and economic uncertainties, including the impact of the conflict in Iran, which has curtailed air travel and diminished foot traffic in key Middle Eastern luxury retail hubs such as Dubai and Riyadh.

The company highlighted a particularly subdued performance in China, where weakening demand notably affected its fashion and leather goods segment. In contrast, regions including the United States, Europe, and Japan experienced stronger sales growth. LVMH’s wine and spirits division, encompassing brands like Moet & Chandon and Hennessy, posted a 6 percent increase in revenues to €1.4 billion, while the watches and jewellery division gained 1 percent to €2.5 billion. Its perfumes and cosmetics segment also saw a 6 percent rise, reaching just over €2 billion.

Despite the challenges in China, where consumer spending patterns remain uncertain, LVMH pointed to resilience in the U.S. market, which accounts for more than a quarter of its sales and has helped offset some of the regional downturns. The company’s exposure to American demand includes Louis Vuitton and Tiffany & Co., bolstering its overall performance amid uneven global conditions.

LVMH’s outlook remains cautiously positive. The group affirmed confidence in its long-term strategy, emphasizing a continued focus on enhancing brand desirability, product quality, retail excellence, and organizational agility. Year-to-date, the company reported a 2 percent increase in sales to €57.1 billion.

The results also come amid legal tensions impacting brand reputations, notably a trademark dispute with Molly Tea, a Chinese tea chain fined £1.1 million for infringing on Louis Vuitton’s intellectual property rights. This dispute has stirred social media backlash in China, contributing to localized boycotts and exerting downward pressure on Louis Vuitton's sales in the region.

LVMH’s shares, traded on the Paris stock exchange, had declined nearly 40 percent in the year up to the latest earnings report, with the company’s market capitalization dropping by hundreds of billions of euros over the past three years to just under €190 billion. Following the earnings release, the stock gained 1.2 percent, closing at €384.50.

The luxury sector remains under close scrutiny as other major players, including Kering, Richemont, and Hermès, prepare to release their quarterly results in the weeks ahead, amid broader concerns about shifting consumer dynamics and geopolitical influences on global luxury demand.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.